Unit economics sounds expensive. It is three questions: what does a customer cost, how fast do they pay it back, and what are they worth over time? All numbers in this article are illustrative.
CAC: the cost of winning one customer
Spend ₦500,000, win 250 customers, and your CAC is ₦2,000. Simple. The trap is blended CAC, where organic and paid customers are mixed together and a bad channel hides inside a good average.
Payback: how fast you earn it back
If each customer pays ₦1,000 a month, you earn back ₦2,000 in two months. That is your payback period. Shorter is safer.
LTV: what a customer is worth
If a customer stays twelve months, their lifetime value is ₦12,000. Divide by CAC and you get 6. A common rule of thumb is to aim for at least 3.
- Spend
- ₦500,000
- Customers won
- 250
- CAC
- ₦2,000
- Revenue per customer
- ₦1,000 / month
- Payback
- 2 months
- LTV (12 months)
- ₦12,000
LTV : CAC6 : 1
Illustrative, not a real company.
Plug in your own numbers
CAC₦2,000
Payback2.0 mo
LTV₦12,000
LTV : CAC6.0 : 1
Healthy ratio, and payback fits inside your runway.
