Calculate unit economics and cohort retention
Paste raw transactions and monthly marketing spend. Get CAC, LTV and a monthly cohort retention table, plus three ways to improve your LTV to CAC ratio.
How to use it
- Prepare transactions and marketing costs Export your users' purchase history (user ID, date, amount) and your monthly marketing spend.
- Paste the data and run the case Paste each dataset into its field, or attach the CSV files.
- Check the unit metrics and retention table Review the LTV to CAC ratio, the monthly cohort table and the suggested actions, and spot-check one cohort by hand.
The prompt
You are an elite CFO and SaaS financial analyst. Analyze the following raw transaction history and marketing costs to compute unit economics. Marketing Spends: [MARKETING_SPEND_BY_MONTH] Raw Transaction Data (User ID, Date, Amount): [TRANSACTION_DATA] Please calculate: 1. Customer Acquisition Cost (CAC) for each month. 2. Monthly Cohorts (Month of acquisition, active users count in Month 0, 1, 2, 3+). 3. Cohort Retention Rates (%) over time. 4. LTV (Lifetime Value) estimation based on average revenue per user (ARPU) and retention. 5. Provide 3 concrete suggestions to improve the LTV/CAC ratio. Present all calculation results in formatted markdown tables.
Example result
Assumptions: one plan at $49/month, so ARPU = $49 per active customer per month. Gross margin isn't in the data — I assume 80% (typical for software; replace it with yours). A customer is "acquired" in the month of their first payment.
1. Customer acquisition cost (CAC)
| Month | Marketing spend | New customers | CAC |
|---|---|---|---|
| Jan 2026 | $2,000 | 8 | $250 |
| Feb 2026 | $2,400 | 10 | $240 |
| Mar 2026 | $1,800 | 6 | $300 |
| Total | $6,200 | 24 | $258 |
2. Monthly cohorts (active paying customers)
| Cohort | Month 0 | Month 1 | Month 2 | Month 3 |
|---|---|---|---|---|
| Jan 2026 | 8 | 6 | 5 | 5 |
| Feb 2026 | 10 | 7 | 6 | — |
| Mar 2026 | 6 | 5 | — | — |
3. Retention rates
| Cohort | Month 0 | Month 1 | Month 2 | Month 3 |
|---|---|---|---|---|
| Jan 2026 | 100% | 75.0% | 62.5% | 62.5% |
| Feb 2026 | 100% | 70.0% | 60.0% | — |
| Mar 2026 | 100% | 83.3% | — | — |
| Weighted | 100% | 75.0% (18/24) | 61.1% (11/18) | 62.5% (5/8) |
Most churn happens in the first month (25% leave). After that, month-to-month retention from Month 1 to Month 2 is 11/13 = 84.6%, i.e. about 15% monthly churn. Month 2 → 3 looks flat, but that's one cohort of 5 people — too small to trust.
4. LTV
LTV ≈ ARPU × gross margin ÷ monthly churn = $49 × 0.80 ÷ 0.15 ≈ $261
| Metric | Value |
|---|---|
| Blended CAC | $258 |
| LTV (80% margin, 15% churn) | $261 |
| LTV / CAC | 1.0× |
| CAC payback | ≈ 6.6 months of gross margin |
At 1.0× you roughly break even on each customer. A healthy subscription business aims for 3× or more.
5. Three ways to improve LTV/CAC
- Fix month one. A quarter of customers leave after their first payment. An onboarding sequence (a setup call or three emails showing the core feature) is the cheapest lever: cutting first-month churn from 25% to 15% keeps 10 more of every 100 new customers paying, at no extra CAC.
- Offer an annual plan at two months free ($490/year). Annual payers can't churn monthly, and the cash upfront shortens payback.
- Cut or rework March's channel mix. March CAC was $300 versus $240 in February. Check which campaign brought the 6 March customers and move budget to February's best performer.
Small sample: 24 customers over three months. Treat the figures as direction, not precision, and rerun this with three more months of data.