Case type 23
Unit economics and subscription businesses
Whether a business makes money on each order or customer: contribution per order, customer acquisition cost (CAC), lifetime value (LTV), churn, and cohorts.
18 min1 lesson Last reviewed
Start the lesson Unit economics and subscription businesses
Key takeaways
- Build contribution per order from price to profit.
- Before asking how to grow, check that each order or customer makes money; then grow the units that do.
- Calculate CAC, LTV, LTV/CAC, and CAC payback.
- Read a cohort to find churn.
- Find the levers that fix negative unit economics.
By the end you will be able to
- Build contribution per order from price to profit
- Calculate CAC, LTV, LTV/CAC, and CAC payback
- Read a cohort to find churn
- Find the levers that fix negative unit economics
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Common questions: Unit economics and subscription businesses
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