How to Calculate Customer Level Economics?

You are a growth analyst at ShopEase, an emerging Indian e-commerce platform. Your CEO seeks insights into customer-level economics for the upcoming fiscal year. Your task includes analyzing current customer data and presenting a detailed report.


The key details are:
  • - Initial customer acquisition cost (CAC): ₹1,000 per customer.
  • - Average net margin per customer per month: ₹1,500.
  • - Monthly retention rate: 90%.
  • - Fixed costs (server maintenance, salaries, etc.): ₹750,000 per month.
  • - Variable cost per order: ₹150.
  • - Average number of orders per customer per month: 2.

You are expected to prepare the following key metrics:

  • 1. The monthly churn rate.
  • 2. The payback period.
  • 3. Break-even point in terms of the number of customers.
  • 4. LTV/CAC ratio.

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