Calculating Time Payback Of CAC

How Soon Will You Get Your CAC Back?

How does one calculate the extent it takes for a client to pay back what it cost you to secure them? This is what time payback of CAC (customer acquisition cost) is all about.

Time To Payback CAC

The time to payback customer acquisition cost shows you how long it takes for your company to earn back the CAC it spent acquiring new customers as well as the cost of maintaining them (customer service).

Calculating Time To Payback CAC

There are few inputs required for this: CAC = average customer acquisition cost, MRR = average monthly recurring revenue, ACS = average cost of service and MAR = Margin adjusted revenue (MRR-ACS).

Calculate CAC

Calculate your yearly sales and marketing cost by new customers yearly. Or, just try the CAC calculator by swiping up 

Calculate CAC Payback Period

To calculate the payback period, you need: CAC, MRR, and ACS. For example: If CAC =$8,500 and MAR =$1,000, then Time to Payback CAC = $8,500 ÷ $1,000 = 8.5 months.  Calculate CAC by swiping up 

Importance Of Time To Payback CAC

This metric is one of many that you can use to determine bottom-line results of your marketing efforts.

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