Unit Economics Revisited: Revenue Per [X]

You make $100k in revenue this month.

But on what?

Revenue per customer: $100k / 100 customers = $1,000/customer

Revenue per user: $100k / 500 users = $200/user

Revenue per transaction: $100k / 2,000 transactions = $50/transaction

Revenue per feature: $100k / 10 features = $10k/feature

Same revenue. Different unit economics.

The right metric depends on your business model.

Choosing the Right “Unit”

What’s the atomic unit of your business?

SaaS: Customer (one organization pays one fee)

E-commerce: Transaction or Order (one purchase)

Marketplace: Seller or Buyer (depends which side generates revenue)

Ad tech: Impression or Advertiser (depends the model)

Mobile app: User or Session (depends if subscription or ad-supported)

Pick the most relevant unit. Calculate unit economics around it.

Revenue Per Customer

Best for: Subscription businesses, B2B SaaS, services

Calculation: Total revenue / Number of customers

Example:

MRR: $50,000
Customers: 500
Revenue per customer: $100/month

What it tells you:

How much each customer is worth on average
How to scale (if you want $200k MRR and each customer is worth $100, you need 2,000 customers)

What it hides:

Variance between customers (some pay $10, some pay $1,000)
If you have power law distribution (10% of customers generate 80% of revenue)

Better: Track revenue per customer by segment (don’t mix SMB and Enterprise together).

Revenue Per User

Best for: Products with multi-user accounts, freemium models

Calculation: Total revenue / Total users

Example:

MRR: $50,000
Total users (across all accounts): 5,000
Revenue per user: $10/month

What it tells you:

How much revenue each person using the product generates
Useful for freemium (most users are free, some pay)

What it hides:

Difference between free and paid users (free users generate $0)
Account structure (some accounts have 1 user, some have 100)

Better: Track revenue per user separately for free vs. paid users.

Revenue Per Transaction

Best for: E-commerce, marketplaces, payment processors

Calculation: Total revenue / Number of transactions

Example:

Revenue: $100,000
Transactions: 2,000
Revenue per transaction: $50

What it tells you:

Average order value
Useful for understanding purchase behavior

What it hides:

High-value customers might have few transactions
Low-value customers might have many transactions

Better: Track revenue per customer (lifetime) and revenue per transaction (average order value) separately.

Gross Profit Per Unit

Beyond revenue, calculate profitability per unit:

Gross profit = Revenue - COGS (Cost of Goods Sold)

Example:

Revenue per customer: $100/month
COGS per customer: $30/month (hosting, payment processing, support)
Gross profit per customer: $70/month

This shows: After paying for the product itself, each customer generates $70/month in profit.

This profit covers salaries, marketing, and other overhead.

Healthy margins by industry:

SaaS: 70-80% gross margin (COGS is minimal)
E-commerce: 30-50% gross margin (high product costs)
Marketplace: 15-40% gross margin (depends on model)

If your gross margin is below these, you have a cost problem.

LTV Per Channel

Different channels have different unit economics:

Organic search:

CAC: $100
LTV: $5,000
LTV:CAC ratio: 50:1 (excellent)

Paid search:

CAC: $500
LTV: $3,000
LTV:CAC ratio: 6:1 (good)

Paid social:

CAC: $800
LTV: $2,000
LTV:CAC ratio: 2.5:1 (acceptable but risky)

The healthier channels have higher LTV:CAC ratios.

Revenue Per Feature

For products with multiple features, understand which drives the most value:

Usage-based pricing:

“API calls” feature: Generates $30k/month (customers value this most)
“Storage” feature: Generates $5k/month
“Integrations” feature: Generates $2k/month

Invest in the features that drive the most revenue.

Revenue Per Employee

Startups obsess about this:

Revenue per employee = Total revenue / Number of employees

Example:

Revenue: $10M
Employees: 50
Revenue per employee: $200k

This shows: Each employee generates $200k in annual revenue.

Benchmarks:

Healthy SaaS: $150-300k per employee
Mature SaaS: $250-500k per employee
Hyper-efficient SaaS: $500k+ per employee

Low revenue per employee means either:

You’re not growing fast enough, or
You have too many employees

High revenue per employee means:

You’re scaling efficiently
Or you’re about to burn out your team

The Vanity Metric Trap

Some “unit economics” are misleading:

Bad metric: Revenue per visit

“We get 10k visits/month and $10k revenue = $1 per visit”

This hides the real unit (customer). One customer might visit 100 times but generate $1,000 in revenue. That’s $1,000 per customer, not $1 per visit.

Better metric: Revenue per customer

“We have 100 customers generating $10k revenue = $100 per customer”

Bad metric: Gross views per video

“Our videos get 100k views and generate $500 in ads = $0.005 per view”

This hides how many unique users and how much each user is worth.

Better metric: Revenue per creator or revenue per subscriber

The Unit Economics Waterfall

Combine multiple unit economics to see the full picture:

Metric	Value	Insight
Revenue per customer	$1,000	Each customer worth $1k/year
Gross profit per customer	$700	After product costs, $700 profit
CAC	$500	Costs $500 to acquire
Payback period	8.6 months	Recover CAC in ~8.6 months
LTV (3-year)	$2,100	Total lifetime profit
LTV:CAC	4.2:1	Healthy ratio

This waterfall shows: You have good unit economics. Keep acquiring customers at $500 CAC.

When Unit Economics Break

Scenario: CAC increases while LTV stays flat

Before: CAC $500, LTV $2,100, ratio 4.2:1 ✓
After: CAC $1,000, LTV $2,100, ratio 2.1:1 ✗

You’re still profitable but less so. Margins compress.

Action: Either reduce CAC (cheaper channels) or increase LTV (expansion, less churn).

Scenario: CAC stays flat but LTV decreases

Before: CAC $500, LTV $2,100, ratio 4.2:1 ✓
After: CAC $500, LTV $1,200, ratio 2.4:1 ✗

Churn increased or expansion decreased. New cohorts are less valuable.

Action: Fix retention, reduce churn, increase expansion.

The Takeaway

Unit economics are the foundation of a scalable business.

Choose the right unit for your business model (customer, user, transaction, etc.).

Calculate gross profit per unit, not just revenue.

Track unit economics by channel, cohort, and segment (not just overall average).

When unit economics break, identify which component shifted (CAC, LTV, churn, expansion) and fix it.

We help you calculate unit economics correctly, track them over time, and identify when something is breaking before it becomes a crisis.