Pricing and Unit Economics Analyzer

A business can grow revenue while losing money on every customer, and never see it until cash runs out. This skill analyzes the economics of a single unit (a customer, a deal, a product) to reveal the real margin, the payback, and whether growth is healthy or subsidized, so pricing and growth decisions rest on whether the unit actually works.

1. The price and the pricing model (one-time, subscription, usage).
2. The direct costs to deliver one unit (cost of goods or cost to serve).
3. The cost to acquire a customer (CAC), if analyzing customers.
4. Retention or lifespan, for lifetime value.
5. Relevant fixed costs, for context.

1. Compute the contribution margin per unit

Price minus the direct cost to deliver. This is the money each unit contributes before fixed costs. A thin or negative contribution margin means scale makes things worse, not better.

2. For customers, weigh CAC against LTV

Estimate lifetime value (contribution margin times expected lifespan) and compare to CAC. A healthy ratio and a reasonable payback period indicate acquisition is an investment, not a leak. Flag when payback is dangerously long.

3. Test the pricing against value and cost

Consider whether price reflects the value delivered and comfortably covers the cost to serve with room for fixed costs and profit. Underpricing relative to cost-to-serve is a common quiet killer.

4. Find the levers

Identify which lever most improves the economics: price, cost to serve, retention, or acquisition cost. Rank them by impact so effort goes where it counts.

5. Show the sensitivity

How the picture changes if a key input moves (price up 10 percent, churn down, CAC up), so decisions account for uncertainty.

ALWAYS use:

# Unit Economics: [Unit / Product / Customer]
## Contribution margin per unit (price, direct cost, margin)
## Customer economics (CAC, LTV, ratio, payback) if applicable
## Assessment (healthy / subsidized / underwater) and why
## Levers ranked by impact
## Sensitivity (what moves the picture)
## Assumptions

• Confusing revenue with margin.
• Ignoring the full cost to serve.
• Treating a long CAC payback as fine.
• Presenting one scenario with no sensitivity.

This analyzes figures the user provides; it is not financial or investment advice. Never invent costs or rates; use placeholders and flag missing inputs. Results are only as good as the inputs, so state the assumptions plainly.

The analysis shows a subscription with healthy gross margin but a CAC payback of 14 months, flags retention as the highest-impact lever, and shows how a modest churn improvement pulls payback under a year.