Whether each customer or unit is worth acquiring.
| Concept | Explanation | |---|---| | Customer acquisition cost | Sales and marketing cost required to acquire a customer. | | Lifetime value | Estimated gross profit or cash contribution from a customer over the relationship. | | Payback period | Time required to recover acquisition cost. | | Retention | Share of customers, revenue, or usage that remains over time. | | Churn | Rate at which customers or revenue are lost. | | Average revenue per user | Revenue divided by users or accounts. |
Attractive aggregate growth can hide weak unit economics if each new customer requires unsustainably high incentives or support.