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The two numbers that decide whether scaling ads builds an empire or burns it: months to recover each customer, and lifetime value per dollar spent.
Your unit economics
7.7 mo
CAC payback period
Months of margin to recover one customer
$47
Gross profit / order
55% of $85
$374
Estimated LTV
Over 2 years at 4x/yr
3.1 : 1
LTV : CAC
3:1+ is the healthy bar
Verdict
LTV:CAC of 3.1:1 is alive but fragile - CAC returns after 7.7 months. Healthy targets: under 6-month payback and 3:1+. Lifecycle flows and AOV work fix this fastest.
Fix my unit economicsRules we run by
- Under 6-month payback lets paid channels scale aggressively
- 3:1 LTV:CAC minimum; below 1.5:1 means structural fixes before more media
- Lifecycle email + WhatsApp typically adds 20-35% to LTV within two quarters
Payback questions we hear weekly
What is a good CAC payback period?
Under 6 months lets paid channels scale aggressively with comfortable cash conversion. 6-12 months is workable for higher-LTV B2B. Beyond 12 months, growth consumes cash faster than it returns - fix retention or pricing before adding media budget.
What does LTV:CAC of 3:1 actually mean?
Every dollar spent acquiring a customer should return about three dollars in gross profit over their lifetime. Below ~1.5:1 the business loses money on acquisition; above 5:1 usually means you are under-investing in growth and can spend more aggressively.
How do I improve payback fastest?
In order of typical impact: raise repeat purchase rate (lifecycle email + WhatsApp flows add 20-35% of sales), increase AOV (bundles, thresholds), then reduce wasted acquisition spend. Cutting CAC alone is the slowest lever because auctions price your category.
Unit economics need surgery?
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