CAC Payback & Lifetime Ratio Calculator

How the cac payback & lifetime ratio calculator works

Customer acquisition cost is cohort acquisition spend divided by new customers acquired. Include the acquisition costs appropriate to that cohort and use a consistent attribution window. Money inputs round half-up to cents before the ratios. The raw per-customer acquisition ratio is used in dependent calculations even when its currency display rounds.

Monthly contribution is monthly revenue less variable service cost. Simple payback months equals CAC divided by positive monthly contribution. Expected-horizon contribution is monthly contribution times entered paid months; dividing it by CAC gives a contribution-to-CAC multiple. This is not a revenue-only lifetime ratio.

Zero customers makes acquisition ratios undefined. Zero CAC with positive monthly contribution gives zero payback but an undefined lifetime/CAC multiple; nonpositive contribution has no finite payback. Paid months is your assumption rather than a churn-derived estimate. No discounting, expansion, tax, fixed overhead or universal performance target is applied.

Worked example

Acquisition spend of 10,000 for 50 customers gives CAC of 200. Monthly revenue of 100 less variable cost of 40 gives 60 contribution and approximately 3.333 months simple payback. Twelve paid months imply 720 contribution, or 3.6 times CAC, leaving 520 after acquisition cost. If acquisition spend rises to 15,000, CAC becomes 300 and payback becomes 5 months.

Sources and assumptions

The source material explains the underlying calculation or pricing structure. Entered prices, costs, schedules and scenario choices are your assumptions; this tool does not obtain supplier quotes or predict actual results.

• Stripe: CAC, monthly contribution and payback