CAC: what one paying customer cost you
Customer acquisition cost is what you spent to win one paying customer. The payback period says how many months that customer needs to earn it back.
The formula
CAC = marketing spend ÷ new paying customers · payback = CAC ÷ what a customer leaves you a month
An example
€2,000 of ads and creators brought 50 paying customers: CAC is €40. They pay €8 a month and you keep €6.80 after a 15% store fee, so the cost is earned back in 40 ÷ 6.80 = 5.9 months.
Work it out with your numbers →How Sumly counts it
- ROI shows the cost per paying customer of every source and campaign you tie a cost to.
- For each, it also shows how many months today's subscriptions need to earn back what is still missing.
Mistakes that make it lie
- Dividing by installs or sign-ups instead of paying customers.
- Leaving out what you pay creators, agencies and tools.
- Ignoring churn: a customer who leaves in month three never pays back a six-month CAC.
Questions
What is a good CAC payback period?
Shorter is safer. Many small subscription businesses aim for under a year; with monthly churn above 8% even six months is risky, because many customers leave before they have paid it back.
How does CAC relate to LTV?
LTV ÷ CAC says how many times a customer pays back what they cost. Three or more is a common aim.
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