Estimate customer acquisition payback
Calculate when contribution covers acquisition spend.
The scenario
Acquiring a subscriber costs $72, and each active month leaves $18 before fixed costs.
With no churn, payback is four active months. If some subscribers cancel earlier, the acquisition cohort's payback can take longer or never occur.
Apply it to your own work
Build cumulative contribution by cohort and compare it with acquisition cost. Use the first month the curve crosses the cost as observed payback.
What to watch for
Gross subscription revenue is not contribution. Include refunds, variable service costs, and payment fees in the model.
Build a cumulative contribution row
For 100 acquired subscribers at $72 each, the cohort must recover $7,200. If 100, 85, 70, and 60 subscribers are active in the first four months, contribution at $18 each totals $5,670. The simple four-month estimate fails once churn is included.
Use realized contribution when it arrives and mark the months that still rely on forecasts. Segment cohorts by offer where acquisition costs and retention differ, and track whether projected payback requires cash beyond your planning horizon.
Try a related tool
Estimate what you can pay to acquire an order while reserving a desired contribution. Use consistent per-order inputs.
