CAC payback period calculator
The shorter the payback, the sooner marketing money comes back and the less growth depends on outside cash.
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How to use it
- Enter customer acquisition cost (cac), monthly revenue per customer and gross margin.
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Monthly gross profit per customer = monthly revenue per customer × gross margin ÷ 100. Payback months = CAC ÷ monthly gross profit per customer.
Example
Inputs: Customer acquisition cost (CAC) = 600, Monthly revenue per customer = 50, Gross margin = 80 %. Result: Payback period: 15 months; Monthly gross profit per customer: 40.00.
Limits and caveats
- It assumes the customer stays and pays the same each month until payback.
- Fixed company overhead is left out; it only measures recovering the acquisition cost.
Questions about this tool
Why gross profit and not revenue?
Part of revenue pays for delivering the product or service. Only what remains after that actually pays back the acquisition cost.
What if the customer cancels before payback?
You lose the difference. Compare payback with average customer lifetime: if customers stay 10 months and payback is 15, acquisition loses money.
Does it work for shops, not only subscriptions?
Yes, once you turn a customer's purchases into average monthly revenue, such as yearly revenue ÷ 12.