A good indicator is 3 or higher

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As a result, we can say that one buyer brings the entrepreneur 5266 rubles of profit during the entire period of interaction with the company.

Step 4
In the end, all that remains is to calculate the unit economics of the project itself and compare two indicators: LTV and CAC. When dividing the first metric by the second, we get: 5266 ÷ 500 = 10.5.

Then the business receives more than it spends. If the ratio is lower, then the costa rica phone number list cost structure or the focus of the work and the way the marketing budget is used should be reviewed.

LTV helps you track the performance and profitability of your business in the long term. However, if you lack data, you can use an alternative calculation formula. To find out the profit for a single period, you should calculate ARPU.

Calculating the ARPU metric

Let us clarify that ARPU shows how much money one person spends on average on purchasing a service or product over a set period of time - a day, a month, or, for example, a quarter.

The user in the ARPU formula is a person who is simply aware of the existence of your product or company. For example, he may have visited your office, website or social networks, but has not yet made a purchase.

"C" is the conversion or a certain share of potential buyers who performed the target action intended by marketers. Let's say they visited the site, filled out a survey or, in the most classic case, paid for an order or made a purchase.