Unit economics: the only math that matters

Most adviser firms measure CPL and stop there. CPL is an input. The outputs that decide whether your firm lives or dies are CAC, LTV and payback.

The three numbers

CAC (Customer Acquisition Cost)

All costs to acquire one paying client: media spend, agency fees, CRM costs, a share of adviser time on non-billable first-call qualification.

CAC = Total acquisition spend / Number of new clients.

For a pure-media view: blended CAC = Total media spend / New clients.

LTV (Lifetime Value)

Gross margin contributed by a client over the expected relationship:

LTV = Annual revenue per client × Gross margin % × Expected relationship years.

For a wealth manager charging 1% AUM on £200k client, 70% margin, 8-year average relationship: LTV = £2,000 × 0.70 × 8 = £11,200.

Payback period

Months to recover CAC from the client:

Payback = CAC / (Monthly revenue per client × Gross margin).

Under 12 months is healthy for most advice niches. Under 6 months is excellent. Over 24 months usually means the model does not scale.

CAC by niche (UK benchmarks)

Based on the Broadbench benchmark dataset:

NicheMedian blended CACRealistic LTVPayback months
First-time buyer mortgage£180-£420£1,2004-8
Remortgage£150-£380£1,0003-6
Equity release£420-£820£3,5006-12
Pension transfer£800-£1,800£5,5008-18
Wealth management£1,200-£3,200£18,0009-22
Family office£3,800-£9,200£80,00012-30
Protection / life£120-£380£800-£2,4004-12

Worked example: mortgage adviser

Inputs:

  • Meta spend: £5k/month.
  • CPL: £15.
  • Leads: 333/month.
  • MQL rate: 45%.
  • Appointment rate from MQL: 55%.
  • Client rate from appointment: 32%.
  • Revenue per completion: £1,500.
  • Gross margin: 72%.

Derived:

  • Clients/month: 333 × 0.45 × 0.55 × 0.32 = 26.4.
  • CAC (media only): £5,000 / 26.4 = £189.
  • Gross profit per client: £1,500 × 0.72 = £1,080.
  • Payback months (completion deal, 18-month drip): £189 / (£1,080 / 18) = 3.1 months.

Healthy. Can scale spend.

Worked example: wealth manager

Inputs:

  • LinkedIn spend: £8k/month.
  • CPL: £320.
  • Leads: 25/month.
  • MQL rate: 40%.
  • Appointment rate: 60%.
  • Client rate: 28%.
  • Annual fee per client: £2,800 (1% of £280k).
  • Gross margin: 68%.
  • Expected relationship: 7 years.

Derived:

  • Clients/month: 25 × 0.40 × 0.60 × 0.28 = 1.68.
  • CAC (media only): £8,000 / 1.68 = £4,762.
  • Annual gross profit per client: £2,800 × 0.68 = £1,904.
  • LTV: £1,904 × 7 = £13,328.
  • LTV/CAC: 2.8x (target: 3x+).
  • Payback months: £4,762 / (£1,904/12) = 30 months.

Borderline. Needs either lower CAC or higher LTV (upsell, cross-sell, retention).

When to scale

Scale when:

  • Payback <= target (12 months for consumer; 18-24 for wealth).
  • LTV/CAC >= 3x.
  • Capacity exists to service new clients.

Do not scale when:

  • Payback is deteriorating month-on-month.
  • MQL rate is dropping as spend rises.
  • Adviser capacity is the bottleneck.

Scaling without breaking economics

The default pattern when scaling paid media: CPL rises, MQL rate drops, CAC balloons. Mitigations:

Expand audience, do not lower targeting

Add new creative concepts, new interest angles, new geographies. Do not strip targeting criteria to hit volume.

Test channels in parallel, do not abandon

Layer Google on Meta (not replace). Layer LinkedIn on both. Each channel has a volume ceiling.

Fix the weakest stage

If MQL rate is the bottleneck, fix qualifying questions. If appointment rate is the bottleneck, fix scripts and speed. If client rate is the bottleneck, fix the adviser.

Plan adviser capacity ahead

Hire advisers 8-12 weeks before scaling spend. Nothing kills LTV faster than overloaded advisers who cannot service clients properly.

The CFO-ready dashboard

Present the board with:

  • Monthly new clients.
  • Blended CAC.
  • Payback months.
  • LTV/CAC ratio.
  • Capacity utilisation.
  • Forward pipeline (months of booked appointments).

Not CPL. Not "cost per lead by channel". CFOs need economics, not media metrics.

What next

Calculate your own CAC and payback today. If you cannot do it in 30 minutes, that is the first problem to fix. Then use the Lead Forecast Simulator on this site to model scenarios.