PLG Revenue & Unit Economics Modeler
Model product-led growth revenue with LTV:CAC analysis, conversion funnels, expansion modeling, and growth efficiency metrics.
LTV:CAC Ratio
14.3x
Excellent
Projected ARR (24mo)
$1,339,865
1359 customers
CAC Payback
3.5
months (Excellent)
Net Revenue Retention
140%
Net positive
Acquisition Funnel
Benchmark: 10-25%
Users who hit "aha" moment
Benchmark: 15-30% for activated users
Overall Conversion:
1.72%
43 new customers/month
Monetization & Retention
Benchmark: 2-5%
Upsells & seat expansion
Avg Lifetime:
25.0 months
LTV:
$3,950
Acquisition Costs
Hybrid/touchpoints
Calculated CAC:
$277
Monthly Spend:
$20,000
Growth Efficiency Metrics
3.7
≥4 is excellent
2.04
≥0.75 is efficient
$111,655
Month 24
$4,294
/month at end
Monthly Projection
| Month | Signups | New Customers | Churned | Total Customers | MRR | ARR |
|---|---|---|---|---|---|---|
| 1 | 2.5K | +43 | -0 | 43 | $3,533 | $42,395 |
| 4 | 2.9K | +50 | -5 | 175 | $14,378 | $172,536 |
| 7 | 3.4K | +57 | -11 | 312 | $25,634 | $307,607 |
| 10 | 3.9K | +67 | -16 | 460 | $37,794 | $453,523 |
| 13 | 4.5K | +77 | -23 | 619 | $50,857 | $610,284 |
| 16 | 5.2K | +89 | -29 | 793 | $65,153 | $781,835 |
| 19 | 6K | +103 | -37 | 985 | $80,928 | $971,131 |
| 22 | 7K | +120 | -45 | 1.2K | $98,674 | $1,184,090 |
| 24 | 7.7K | +132 | -51 | 1.4K | $111,655 | $1,339,865 |
Mastering PLG Revenue Modeling
Expert Industry Guide
Product-Led Growth (PLG) has transformed SaaS by making the product itself the primary driver of acquisition, conversion, and expansion. Understanding PLG-specific metrics and modeling approaches is essential for forecasting and strategic planning.
The PLG Funnel Deep Dive
Unlike sales-led models, PLG inverts the funnel: Visitor → Signup → Activation → Engagement → Conversion → Expansion. Activation rate—the percentage who experience core value during trial—is often the strongest predictor of conversion. Focus optimization efforts here first.
LTV:CAC: The North Star Metric
Lifetime Value to Customer Acquisition Cost ratio indicates unit economics health. Below 3:1 signals unsustainable growth—you're spending more than you'll recover. 5:1+ indicates strong economics. However, extremely high ratios (10:1+) might indicate underinvestment in growth.
CAC Payback Period
How many months to recover acquisition cost from a customer. Under 12 months is the gold standard—you're funding growth from operations. 18+ months requires significant capital and creates runway risk. Calculate carefully including all acquisition costs: marketing, sales touches, onboarding.
Net Revenue Retention (NRR)
The ultimate PLG health metric: (Starting MRR + Expansion - Contraction - Churn) / Starting MRR. 100%+ means you grow without acquiring any new customers. Best-in-class PLG companies achieve 120-140% NRR. Expansion should eventually exceed churn.
Quick Ratio & Growth Efficiency
Quick Ratio = (New MRR + Expansion MRR) / (Churn MRR + Contraction MRR). 4:1+ indicates efficient growth—you're adding $4 for every $1 lost. Below 2:1 suggests a 'leaky bucket' where churn undermines growth efforts.
Magic Number (Sales Efficiency)
Net New ARR / Previous Quarter S&M Spend. Above 0.75 indicates efficient growth. Below 0.5 suggests inefficient spend or poor product-market fit. Use this to calibrate marketing investment.
Expansion Revenue Strategy
Mature PLG companies derive 40-60% of growth from expansion. Strategies: usage-based pricing (automatic expansion), seat additions (team virality), feature tiers (natural upgrade path), and cross-sell (complementary products). Design expansion into your pricing model.
Disclaimer: This content is for informational purposes only and should not be considered professional advice. Always consult with qualified professionals for specific guidance related to your situation.