CAC Payback Period

How fast your customer pays back their acquisition cost.

A free growth calculator from AMA Orlando, the American Marketing Association chapter serving Central Florida. It runs in the browser, needs no login, and captures nothing.

What you enter

• Customer acquisition cost
• Monthly revenue per user
• Gross margin
• Monthly churn rate

How it is calculated

• Gross profit per month = monthly revenue per user × gross margin
• CAC payback period = customer acquisition cost / gross profit per month
• Predicted LTV = gross profit per month / monthly churn rate
• LTV to CAC ratio = predicted LTV / customer acquisition cost

How to read the result

Payback period is a cash flow question and LTV to CAC is a profitability question, so read them together. A ratio of 3:1 or better is healthy. A long payback period starves growth even when the ratio looks fine, because every new customer ties up cash that cannot fund the next one.

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