Formulas used by this calculator
- Monthly contribution = monthly revenue per acquired customer − monthly serving costs per acquired customer
- Payback months = CAC ÷ positive monthly contribution
- Zero CAC needs zero months to recover; positive CAC has no finite payback when monthly contribution is zero or negative
Worked example
Illustrative CAC is $240. Monthly revenue per acquired customer is $50 and included serving costs are $20.
Monthly contribution is $30. Modeled payback is 240 ÷ 30 = 8 months, assuming that contribution continues.
Using revenue alone would produce 4.8 months and overlook the included serving costs.
Use contribution rather than revenue alone
Shopify explains payback through acquisition cost and average monthly gross profit. Here, the monthly denominator is contribution after the serving costs entered, so the cost scope must be stated. Shopify: CAC payback formula.
Match the acquisition-cost scope to the question. A media-only numerator gives media-only payback. A fully scoped numerator includes the other costs of acquiring the cohort. Do not subtract acquisition cost again inside monthly serving costs.
Keep the original acquired cohort in view
Average revenue and costs across the same acquired-customer basis. If some customers become inactive, excluding them can make contribution per original acquisition look stronger than it is. The form asks for per-acquired-customer amounts to keep the denominator visible.
The tool holds monthly contribution constant. It does not estimate future churn, expansion, refunds, or purchase frequency. If contribution changes over time, use a cohort schedule that accumulates realized contribution month by month instead of relying on this single average.
Separate an economic estimate from a cash forecast
Billing upfront and paying suppliers later can create cash timing that differs from a monthly contribution model. The displayed months do not account for invoice dates, collection delays, payment terms, or the cost of financing an acquisition.
Fractional months are a continuous estimate. Actual receipts may arrive on discrete billing dates, so a result of 2.4 months is not a promise that the bank account recovers its outlay on a particular day. Save the assumptions and revisit them with mature cohort data.
Common questions
Why is payback undefined when contribution is negative?
A positive acquisition cost cannot be recovered by repeatedly losing contribution each month under the model's assumptions. A different future revenue or cost trajectory requires a separate schedule, not an invented negative payback period.
Does this estimate customer lifetime value?
No. It estimates how long a constant monthly contribution would take to cover entered CAC. It does not choose a customer lifetime or establish the value of future purchases.