CAC Payback Period Calculator
With churn, because the cohort shrinks while it pays.
Payback period
10 months
8.4 months ignoring churn
Ignoring churn understates payback by 1.6 months, because the cohort shrinks while it is paying you back. The simple division everyone uses assumes every customer survives the whole period.
How the CAC Payback Period Calculator works
The usual calculation divides acquisition cost by monthly contribution and assumes every customer survives the whole period. They do not — the cohort decays while it is paying you back, which pushes real payback out by months.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How is CAC payback calculated?
Accumulate monthly contribution from a cohort, shrinking it by the churn rate each month, until the total covers acquisition cost. Simple division ignores the shrinking and understates the period.
What payback period is healthy?
Under three months lets you grow on cash flow. Six to twelve months requires funding. Beyond that, growth is constrained by capital rather than by demand.
Can payback be infinite?
Yes. If churn is high enough, total lifetime contribution never reaches the acquisition cost — the cohort dies before it pays. No amount of patience fixes that.
How do I shorten it?
Raise first-order value, lower acquisition cost, or bring forward the second purchase. Post-purchase sequences that trigger a repeat order in the first month move this more than anything else.