CAC Payback Calculator
Find out how many months a new customer takes to pay back what you spent to win them.
- Monthly gross profit per customer
- $21.00
- Profit per customer after 12 months
- $132.00
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How to use the CAC payback calculator
- Enter your average cost to acquire one customer, including ads and sales costs.
- Enter the average revenue a customer brings each month, such as a subscription fee or average monthly spend.
- Enter your gross margin to see how many months until the customer has paid back their CAC.
CAC payback formula
This simple version assumes customers stay at least until payback. If many leave early, the real payback is longer.
Example
A subscription box spends 120 to win each customer, who pays 35 a month at a 60% gross margin. Each customer brings 21 in monthly gross profit, so CAC pays back in 120 ÷ 21 = 5.7 months, and the first year leaves 132 profit per customer.
Why CAC payback matters
It tells you how long your cash is tied up in each new customer. A shorter payback lets you reinvest in growth sooner and means less risk if customers cancel.
What is a good payback period?
For ecommerce and subscription brands, under 6 months is strong and under 12 months is healthy. Longer paybacks need reliable retention and enough cash to fund growth.
Frequently asked questions
How do I calculate CAC payback?
Divide CAC by the gross profit a customer brings each month.
Should I use revenue or gross profit?
Gross profit. Revenue ignores product and delivery costs and makes payback look faster than it is.
What if customers buy only occasionally?
Use their average monthly spend: total yearly spend per customer divided by 12.
How is this different from LTV:CAC?
LTV:CAC compares lifetime value with CAC; payback shows how fast you get your money back.
How can I shorten CAC payback?
Lower acquisition costs, raise first-order value with bundles or upsells, or improve gross margin.
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