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CAC payback calculator for B2B: Months to earn back the cost of a customer

Customer acquisition cost (CAC) payback is the number of months of gross profit a new customer takes to repay what you spent to win them. Enter the sales and marketing spend for a period, the new customers it won, their average first-year contract value and your gross margin. The calculator returns CAC and the payback in months.

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CAC payback calculator

Worked example, with the default inputs

Each new customer costs $30,000 to win and returns $2,500 of gross profit a month, so it pays back in 12 months.

CAC = sales and marketing spend ÷ new customers

payback in months = CAC ÷ (contract value ÷ 12 × gross margin)

Formula shown

How it is worked out

CAC = sales and marketing spend ÷ new customerspayback in months = CAC ÷ (contract value ÷ 12 × gross margin)

gross margin
revenue less the cost of delivering it, as a share of revenue
Worked example, with the default inputs
CAC$1,200,000 ÷ 40 = $30,000
Monthly gross profit$40,000 ÷ 12 × 75% = $2,500
Payback$30,000 ÷ $2,500 = 12 months

Each new customer costs $30,000 to win and returns $2,500 of gross profit a month, so it pays back in 12 months.

Where the defaults come from

No default on this calculator is a published benchmark. Each is an example input chosen so the arithmetic is easy to follow; type your own.

Where the defaults come from
InputDefault, an example input
Sales and marketing spend$1,200,000
New customers in the period40
Average first-year contract value$40,000
Gross margin75%

Which spend to count

Use fully loaded sales and marketing: salaries and commissions, programs, tools and agencies, for the period in which the customers were won. If your cycle is long, lag the spend by the length of the cycle so the customers and the money that won them line up.

Use gross margin, not revenue. A customer repays acquisition cost out of the profit left after serving them, so payback on revenue flatters every company and flatters low-margin ones most.

Which numbers to use

Every default is an example input, not a benchmark. Compare your result with the published payback benchmarks on our CAC payback page, by contract size and motion, rather than with a single figure.

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