Unit Economics
What is Unit Economics?
Unit Economics is the study of the direct revenues and costs associated with a single unit of a business, which in SaaS is typically an individual customer. The most common unit economic metrics are Customer Acquisition Cost (CAC) and Lifetime Value (LTV).
Why It Matters
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It reveals whether the fundamental business model is profitable at the customer level.
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Strong unit economics are a prerequisite for scaling a business efficiently.
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It helps identify which customer segments are the most valuable and which are the most expensive to serve.
