The method
How it is worked out
Payback months = CAC ÷ (ARPA × gross margin)
- CAC
- Sales and marketing spend ÷ new customers
- LTV
- Gross-margin MRR × (1 ÷ monthly churn)
CAC Payback Calculator
Find how many months a new customer takes to repay their acquisition cost on gross margin, and whether to scale spend. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- Attribution lagSpend this quarter often wins customers next quarter.
- Blended vs paidBlended CAC hides how expensive paid channels are.
- ExpansionPayback ignores upsell, which shortens it in practice.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the CAC Payback Calculator
Find how many months a new customer takes to repay their acquisition cost on gross margin, plus lifetime value and the LTV:CAC ratio, and decide whether to scale spend or fix the funnel first.
How it works and an example to tryShow less
How to use the result
CAC is sales and marketing spend divided by customers won. Gross-margin monthly revenue per customer is average revenue times gross margin. Payback is CAC divided by that figure. Lifetime is one divided by monthly churn; LTV is margin revenue times lifetime.
Example to try
£120,000 of spend for 60 customers is a £2,000 CAC. At £250 MRR and 78% margin each customer returns £195 a month: a 10-month payback. With 2% churn, lifetime is 50 months and LTV £9,750, a 4.9× ratio. Scale.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Growth and marketing leads setting budgets, founders reporting to investors and anyone deciding whether a channel deserves more money.
Mistakes worth avoiding
- Using blended CAC when paid channels are far dearer than organic.
- Measuring payback on revenue rather than gross margin.
- Ignoring the lag between spend and the customers it wins.
Questions
What does the CAC Payback Calculator do?
Find how many months a new customer takes to repay their acquisition cost on gross margin, and whether to scale spend.
How should I use the result?
CAC is sales and marketing spend divided by customers won. Gross-margin monthly revenue per customer is average revenue times gross margin. Payback is CAC divided by that figure. Lifetime is one divided by monthly churn; LTV is margin revenue times lifetime.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a cac payback calculator?
Using blended CAC when paid channels are far dearer than organic. Measuring payback on revenue rather than gross margin. Ignoring the lag between spend and the customers it wins.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Results are estimates based on the figures entered, for general information only, and not financial, investment, tax or legal advice. See our terms of use.