Walk unit economics from CAC to contribution payback
Calculate contribution payback using acquisition cost, gross margin, and retention assumptions.
Paid search CAC is $420. New customers pay $160 per month. Gross margin is 70%. First-month onboarding support reduces contribution by $35. Normal monthly contribution after month one is $112. CAC payback = acquisition cost recovered by customer contribution over time The common trap is celebrating low CAC or high signups without checking whether customers contribute enough, long enough, to repay acquisition spend. CAC to contribution payback CAC Sales and marketing cost to acquire one customer. Contribution Revenue after variable delivery and support costs. Payback Months required for contribution to recover CAC. Monthly contribution $160 revenue x 70% margin =…
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