Check Unit Economics Before You Scale
Use LTV:CAC and CAC payback as a management check before increasing acquisition spend.
The reframe: Growth spend is a loan the customer cohort must repay. LTV:CAC LTV:CAC connects retention, gross margin, and acquisition cost. It is useful when assumptions are explicit and dangerous when lifetime value is guessed from optimism. CAC Payback CAC payback turns economics into time. If payback is too long, the company may need more capital before the cohort becomes profitable. Segment First Blended economics can hide truth. Enterprise, mid-market, and SMB cohorts often have different sales costs, retention, support needs, and expansion paths. Management Use Use unit economics to decide where to scale, where to learn, and where to…
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