What is Margin Adjusted Revenue?

Margin Adjusted Revenue is How much your customers pay on average per month

What Time to Payback CAC Means and Why It Matters?

In industries where your customers pay a monthly or annual fee, you normally want your Payback Time to be under 12 months. The less time it takes to payback your CAC, the sooner you can start making money off of your new customers. Generally, most businesses aim to make each new customer profitable in less than a year.

Free Time to Payback Calculator (CAC) | Calculate Payback Time

7 Important Metrics Every Startup Founder Should Care About

Do you all know that it’s more costly to acquire new prospects than to retain existing ones! That’s why extending your CLV is essential to a healthy business model & overall business strategy… Don’t believe us? Here is an Ebook on 7 vital metrics every startup founder should know – you need to read if you want to increase profitability, retention and overall ecommerce success.

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Why these 7 metrics are significant for your business and should be measured at regular intervals?

Generate real ROI on customer acquisition

Enhance your retention marketing strategy

Create more effective messaging, targeting & nurturing

How to Use the Calculator – Step-by-Step

Enter CAC
Input your Customer Acquisition Cost. This should be total sales plus marketing expenses divided by the number of new customers.
Enter Monthly Margin-Adjusted Revenue
Add the monthly revenue a customer brings in, minus direct costs.
Click ‘Calculate’
See how many months it will take to recover your acquisition investment.

Tip: A payback time of less than 12 months is considered efficient in the SaaS and B2C industries.

Understanding Payback Periods

Time to Payback CAC answers the question:

“How long until I break even on a customer?”

This helps you:

Evaluate whether your growth is sustainable.
Make smarter budget and fundraising decisions.
Optimise your sales and onboarding cycles.

Benchmarks for CAC Payback (2025)

Industry	Time to Payback (Months)
SaaS (B2B)	9–18 months
Ecommerce	1–3 months
Fintech	6–12 months
EdTech	3–9 months
HealthTech	6–10 months

Note: Shorter payback periods = stronger financial runway

Practical Example

Inputs:

CAC = ₹6,000
Monthly Margin-Adjusted Revenue = ₹2,000

Calculation:

Time to Payback = ₹6,000 ÷ ₹2,000 = 3 months

Interpretation:

You recover your customer acquisition cost in just 3 months—an efficient and scalable scenario.

Tips to Reduce CAC Payback Time

Increase Margins: Reduce service or product costs without impacting quality.
Upsell/Cross-Sell: Boost monthly revenue per user.
Accelerate Onboarding: The sooner the user gets value, the faster the return on investment.
Lower CAC: Optimise acquisition channels and content marketing for efficiency.
Improve Retention: Retained customers contribute more over time, thereby reducing the pressure on Customer Acquisition Cost (CAC).

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