What unit economics tells you
Unit economics evaluates whether acquiring a customer creates enough gross profit to justify acquisition cost, and whether payback is fast enough for your cash constraints.
Core metrics
- Gross profit LTV: expected gross profit from a customer over their lifetime.
- CAC payback: months to recover CAC from monthly gross profit.
- LTV:CAC: value relative to acquisition cost (helpful, but not sufficient).
How to improve the dashboard
- Increase ARPA: pricing, packaging, upsells, better monetization.
- Increase gross margin: reduce COGS/variable costs, optimize infra and support.
- Reduce churn: activation, onboarding, product quality, customer success.
- Reduce CAC: improve conversion rates, targeting, and sales efficiency.
Common mistakes
- Using revenue LTV instead of gross profit LTV.
- Mixing fully-loaded CAC with revenue-based LTV (mismatch).
- Relying on a single ratio (track payback and cash runway too).