Free calculator
How many months until a new customer pays back what it cost to win them? This one counts churn and expansion, so the answer matches your bank balance.
Margin from one customer, scaled by the chance they are still paying and by expansion.
The first month where the running total of those amounts reaches CAC.
The ten year total of the monthly amounts, divided by CAC.
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CAC payback is the number of months it takes for the gross margin from a new customer to cover what you spent to win them. Until that month, every new customer costs you cash.
The simple formula assumes nobody cancels. This calculator multiplies each month by the share of customers still paying, so churn pushes payback out. Both numbers are shown so you can see the gap.
A common rule of thumb for SaaS is under 12 months for small business customers and up to 18 to 24 months for enterprise contracts with low churn. The right number depends on how much cash you have and how long customers stay.
Three to one is the usual rule of thumb. Below one to one you lose money on every customer. Far above five to one often means you could grow faster by spending more.
All sales and marketing cost for the period divided by new customers won in it: ad spend, salaries and commissions, agencies, tools and free trial costs. Counting only ad spend makes payback look shorter than it is.
Month by month for up to ten years: revenue per account, times gross margin, times the share of customers still active, with expansion applied to the survivors. The total is the expected margin from one new customer.
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