Metric guide · Growth efficiency
CAC payback
Short answer
CAC payback is the number of months it takes for a new customer's margin to repay the cost of acquiring them. It is calculated as CAC divided by the monthly contribution margin per customer. Using margin rather than revenue matters, because store fees, payment fees and hosting come out before the cost is recovered.
The formula
CAC payback (months) = CAC ÷ monthly contribution margin per customer
Unit: Months. Better when it goes down.
Enter CAC, revenue per customer and gross margin to see months to payback and LTV to CAC.
Open the calculatorHow to calculate it
- Calculate CAC for the period from total acquisition spend and new paying customers.
- Find average monthly revenue per new paying customer, normalizing annual plans to monthly amounts.
- Subtract variable costs per customer, such as store or payment fees and hosting, to get monthly contribution margin.
- Divide CAC by monthly contribution margin per customer.
Mistakes that distort it
Dividing CAC by revenue ignores the costs of serving the customer and makes payback look shorter than it is.
The simple formula assumes the customer stays until the cost is repaid. If many customers leave before that month, a view of cumulative margin by signup month is more reliable.
An annual plan paid upfront recovers cash quickly, but the margin is earned across 12 months. Report cash payback and margin payback separately if both matter.
Where Sondola reads it from
Sondola reads this metric from Meta Ads, Apple Ads, Stripe and RevenueCat, with the source and period on every reading. Each reading keeps where it came from, the period and the date it was recorded, and you can download all of it at any time.
See all 34 integrations →Questions
Is CAC payback measured in months?
Yes. It is a count of months, so a lower number means the acquisition cost is recovered sooner.
Why does payback differ between monthly and annual plans?
Annual plans bring cash in upfront and usually churn less within the year. Monthly plans pay back only as long as subscribers keep renewing.
Related metrics
Written by the Sondola team. Benchmarks name their source, basis and date. Changes to how Sondola counts a number are on the corrections page.
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