The growth rate your payback period will fund

A healthy LTV-to-CAC ratio tells you nothing about whether you can afford next month's acquisition spend. One piece of arithmetic does.

By Steve 5 min read
Abstract bridge artwork for The growth rate your payback period will fund

A business with genuinely good unit economics can still run out of money doing more of what works. The ratio of lifetime value to acquisition cost looks fine: 4:1, 5:1, better than the benchmark anyone quoted at the last board meeting. Retention is stable. Gross margin holds. And yet the faster acquisition grows, the tighter the bank balance gets, and nobody in the room can point to what is broken. Nothing is broken. The two numbers are answering different questions. LTV:CAC asks whether a customer is worth acquiring. Payback period…

Keep reading for free

Create an account to read the rest.

The whole library is free. No card, no subscription, no trial that quietly ends. An account simply lets us know who we are writing for, and opens every article from here on.

  • Every article, in full, at no cost
  • New articles published every weekday
  • Takes about twenty seconds
Create a free account I already have one

Free means free. We will not charge you for the library, and you can read as much of it as you like.

Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

More on Growth strategy

Scroll to Top