Method and assumptions
Payback is a cash planning metric. It is sensitive to gross margin, discounts, expansion and the timing of acquisition spend.
CAC payback months = CAC ÷ monthly revenue per account ÷ gross margin.
Worked scenario
Use fully loaded CAC for one cohort and the monthly gross profit produced by an average new account. Model onboarding months separately when customers ramp over time. Compare the payback period with cash runway and contract billing terms, especially when commissions are paid before annual invoices are collected.
How to interpret the result
Payback months estimate how long gross contribution takes to recover acquisition cost. It does not include the time value of money, post-payback retention or future expansion unless explicitly modeled. A healthy average can hide a slow enterprise motion, so review cohorts by channel and segment.
Input reference
- Currency
- Example default: USD
- Sales and marketing spend
- Example default: 60000
- New customers acquired
- Example default: 120
- Average monthly revenue per account
- Example default: 150
- Gross margin
- Example default: 78%
Common mistakes
- Using revenue per customer instead of gross profit.
- Ignoring onboarding delay and ramped usage.
- Comparing cohorts with different CAC cost boundaries.
Before using the result
- Use one documented cohort and acquisition window.
- Model the timing of spend, billing and contribution.
- Compare payback with runway and retention.
Questions to check before deciding
Does payback include retention?
The simple model assumes the account remains active during payback. Use cohort data for churn-adjusted payback.
Should implementation revenue be included?
Include it only when it is repeatable and directly attributable to the same acquisition cohort.
Independent planning calculator. Not financial, tax, legal or investment advice.