CAC payback calculator
Work out customer acquisition cost, payback period, lifetime value and break-even ROAS from five numbers. Free, no account, and nothing leaves your browser.
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Your numbers
Everything spent to acquire customers in the period: ads, tools, salaries, agencies.
New paying customers won in that same period.
Average revenue per customer per month. Divide an annual plan by twelve.
Revenue left after the cost of delivering the service. Software is typically 70–85%.
Optional. Share of customers lost each month. Needed for lifetime value.
Enter spend and new customers to get acquisition cost. Add revenue, margin and churn for payback and lifetime value. Nothing leaves your browser.
The formulas
CAC = spend / new customers
Monthly profit = revenue per customer × gross margin
Payback months = CAC / monthly profit
Lifetime months = 1 / monthly churn
LTV = monthly profit × lifetime months
Break-even ROAS = 1 / gross marginMargin is required rather than assumed, because every figure below it changes when you compute on gross profit instead of revenue — usually by 20–30% in the flattering direction.
Payback is a cash question, not a profit question
Lifetime value gets the attention and payback period decides whether you survive to collect it.
If a customer takes eighteen months to repay what you spent winning them, then every customer you add makes the current month worse. That is fine when the money to bridge it exists and fatal when it does not, which is why payback is the number investors ask about first and the one that constrains how fast you can grow.
Two practical consequences:
- Annual plans transform the maths. Collecting twelve months upfront turns an eighteen-month payback into an immediate one, on the same unit economics. Discounting an annual plan by 20% to get that cash is usually a good trade.
- Payback and LTV can disagree. A high-value customer with a long ramp can have excellent lifetime value and a payback period your bank balance cannot support.
Where LTV goes wrong
The formula assumes churn is constant, and it never is. Real retention curves fall steeply and then flatten as the remaining customers turn out to be the ones who genuinely need the product. Dividing by a single blended churn rate mixes those two populations and produces a number that is too pessimistic about your best cohort and too optimistic about your worst.
Three habits keep it honest:
- Cap the horizon. Count three years at most. A lifetime value that depends on year seven is a forecast, not a measurement.
- Split by cohort. Customers acquired last quarter behave differently from those acquired two years ago, and the average hides it.
- Split by channel. The channel with the lowest CAC often has the worst retention, so its apparent advantage disappears as soon as lifetime is measured rather than assumed. That is the case for computing LTV by acquisition channel rather than for the business as a whole.
The other half of the picture
This tool tells you what a customer costs and when they pay you back. It says nothing about which traffic produced them — for that, put revenue beside visitors with the revenue per channel calculator, or work backwards from campaign spend with the ad cost calculator.
sonex reads revenue from Stripe or Polar and reports it against the channel that earned it, so the acquisition cost you calculate here can be checked against money that actually arrived rather than against conversions a tracker believed it saw.
Frequently asked.
- How do you calculate customer acquisition cost?
- Divide everything spent to win customers in a period — ads, tools, agencies, the salaries of the people doing the work — by the number of new paying customers in that same period. Leaving salaries out is the most common way of arriving at a CAC that looks healthy and is not.
- What is a good CAC payback period?
- Under twelve months is the usual benchmark for subscription businesses, and under six is strong. The reason is cash rather than profit — anything longer means growth has to be financed from somewhere until the customer catches up with what you paid for them.
- Why is payback calculated on gross profit rather than revenue?
- Because revenue is not yours to keep. If a $29 subscription costs $6 a month to deliver, only $23 is available to repay the acquisition cost. Computing payback on the full $29 makes every channel look roughly 25% better than it is.
- What is a good LTV to CAC ratio?
- Three to one is the conventional floor, and it is a floor rather than a target. Below three, acquisition is eating the margin. Far above three usually means you are underspending on a channel that works rather than that the business is unusually healthy.
- What is break-even ROAS?
- One divided by your gross margin. At 80% margin you break even at 1.25x return on ad spend; at 25% margin you need 4x. It is the threshold a campaign has to clear before it contributes anything, and it is specific to your business rather than an industry benchmark.