Find out how long it takes to recover your customer acquisition costs. Understand your unit economics and optimize your growth spend.
Total monthly paid acquisition spend.
Cost to acquire one new customer.
Percentage of customers lost monthly.
Your current monthly recurring revenue.
Average revenue per user per month.
See how churn affects your overall unit economics with your current CAC and ARPU.
| Churn Rate | CAC Payback | LTV:CAC | Customer LTV | Status |
|---|
months payback
months payback
months payback
CAC payback is how many months it takes for a customer to generate enough revenue to cover what you spent acquiring them. It's the break-even point for each customer.
Shorter payback means faster cash recovery. This matters for cash flow, especially if you're scaling acquisition. A 12-month payback means you're financing every customer for a year before seeing returns.
CAC Payback = CAC / ARPU Example: $500 CAC, $100 ARPU:
LTV:CAC of 3:1 is the standard target. Below 3:1, your margins are tight. Below 1:1, you're losing money on every customer. Above 5:1, you might be underinvesting in growth.
Most SaaS businesses target under 12 months payback. Faster is better for cash flow. Enterprise can justify longer payback if retention is exceptional. SMB needs faster returns.
It depends on your market and funding stage. Enterprise SaaS typically sees 12-18 months payback. Mid-market aims for 6-12 months. SMB and self-serve products should target 3-6 months. Venture-backed companies may accept longer payback if growth justifies it, but bootstrapped businesses need faster returns.
Churn doesn't directly change your payback period calculation, but it affects whether you ever recover CAC at all. If a customer churns before payback, you lose money. High churn means many customers leave before you break even. This is why LTV:CAC ratio matters more than payback alone.
LTV:CAC tells you the total return on acquisition spend. Payback tells you how fast you get your money back. A 3:1 LTV:CAC with 12-month payback is different from 3:1 with 3-month payback. Faster payback means better cash flow and less risk, even with the same eventual return.
Three levers: reduce CAC (better targeting, higher conversion, lower ad costs), increase ARPU (price increases, upsells, usage-based pricing), or reduce churn (<a href='/blog/saas-customer-onboarding' class='text-accent hover:underline'>better onboarding</a>, faster time-to-value, proactive support). Improving ARPU usually has the fastest impact.
Long payback strains cash flow and increases risk. Every customer is a bet that takes over a year to pay off. If churn is high, many won't. Either reduce CAC, increase ARPU, or collect more cash upfront through annual contracts. Some enterprise sales justify 18+ month payback if retention is exceptional.
Yes. Blended CAC hides problems. Your Google Ads CAC might be $200 while LinkedIn is $800. Track CAC by channel, then calculate payback for each. Double down on fast-payback channels and fix or cut slow ones.
Calculators are useful. Dashboards that update automatically are better. See your actual CAC payback, LTV:CAC, and unit economics live.
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