LTV/CAC Monitoring System

Unit economics drift. CAC creeps up as channels saturate. LTV decays as product-market fit evolves. Payback periods extend as the customer mix shifts. Without a monitoring system, these changes are invisible until the quarterly board review — by which time the degradation has been compounding for months. A unit economics monitoring system tracks the leading indicators weekly and the computed ratios monthly, with automatic alerts when thresholds are breached.

Monthly Unit Economics Monitor:
──────────────────────────────────────────────────
Metric            Threshold   Actual    Status
──────────────────────────────────────────────────
Blended LTV/CAC    > 3.0x      5.4x     [GREEN]
Ent. LTV/CAC       > 4.0x      6.6x     [GREEN]
MM LTV/CAC         > 4.0x      6.4x     [GREEN]
SMB LTV/CAC        > 3.0x      3.8x     [YELLOW]
Payback (blended)  < 12 mo     6.1 mo   [GREEN]
Payback (SMB)      < 12 mo     9.6 mo   [YELLOW]
Net Retention       > 100%     108%     [GREEN]
Gross Retention     > 85%      89%      [GREEN]
CAC trend (3mo)    < +5%       +3.2%    [YELLOW]
──────────────────────────────────────────────────

2 yellow alerts: SMB efficiency thinning
and CAC trending upward. Neither is red.
Both warrant investigation this month.

1. Define Thresholds by Segment Set green/yellow/red thresholds for each metric by segment. Enterprise LTV/CAC above 5x is green, 3-5x is yellow, below 3x is red. SMB above 3x is green, 2-3x is yellow, below 2x is red. Different segments have different acceptable ranges — apply them.
2. Track Directional Trends An absolute number within threshold but trending downward for 3+ months is a yellow alert regardless of level. A 5.2x ratio declining 0.3x per month will be below threshold in 7 months. The trend matters as much as the level — and catching the trend early gives you time to intervene.