₹1 Lakh Store
⌘K
GETTING STARTED
FIND — Get an Idea
VALIDATE — Hit PMF (Phase 3)
UNIT ECONOMICS — First (Phase 4)
    • Contribution Margin Model
    • COGS Breakdown Sheet
    • Break-Even Calculator
    • Gross Margin Benchmarks
    • Shipping Cost Optimization
    • Platform Fee Comparison
    • Price Sensitivity Testing
    • LTV:CAC Framework
    • Scenario Planning Tool
SCALE — Build to ₹1L/mo
AI & AUTOMATION
ANALYTICS & DATA
FINANCE
TOOLS & CALCULATORS
RESOURCES
  1. UNIT ECONOMICS — First (Phase 4)
  3. LTV:CAC Framework

07 — Unit Economics

LTV:CAC Framework

Customer Lifetime Value must be 3x your Customer Acquisition Cost. If it's not, you're burning cash.
3:1 Target LTV:CAC<₹300 Target CAC₹1,800+ Target LTV12+ Purchase Cycles

3:1

Target LTV:CAC

Minimum for sustainable growth

<₹300

Target CAC

Keep acquisition cost low

₹1,800+

Target LTV

Customer lifetime value goal

12+

Purchase Cycles

Months to build LTV

LTV:CAC Calculation

MetricConservativeGoodExcellent
AOV₹499₹599₹799
Orders1.52.54+
GM45%55%60%+
LTV₹337₹825₹1,918
CAC₹350₹250₹200
Ratio0.96x3.3x9.6x

LTV:CAC Improvement Strategies

Increase LTV

Increase AOV with bundles and upsells

Improve repeat purchase rate (email + WhatsApp)

Build subscription model for recurring revenue

Launch complementary products for cross-sell

Reduce churn with loyalty programs

Decrease CAC

Optimize ad creatives (test 5+ variants)

Use UGC and organic content for free traffic

Referral program (₹100 off for both)

Retarget existing visitors (lower CPC)

WhatsApp marketing (₹0.30-0.80 per conversation — much cheaper than ads)