CAC Calculator

What this tells you

Customer acquisition cost is the fully loaded price of winning one new customer. CAC payback is how long that customer takes to earn it back in gross profit. The formulas are:

CAC = Sales and Marketing Spend / New Customers, and Payback = CAC / (MRR x Gross Margin)

CAC alone is a vanity number. Pair it with payback and you learn how long your cash is tied up before a customer turns profitable.

Why payback beats the LTV:CAC ratio

Most teams obsess over the LTV:CAC ratio. The problem is that LTV leans on a churn assumption and a discount rate, so it can be tuned to say almost anything. Payback period is harder to fudge. It answers a concrete question: how many months until this customer has paid back what you spent to win them.

For B2B SaaS between $100M and $1B ARR, payback exposes cash-flow reality that the ratio hides. Two companies can post the same LTV:CAC and run completely different businesses. One recovers CAC in 8 months and self-funds growth. The other takes 30 months, burns cash on every deal, and needs outside capital to scale. Same ratio, opposite outcomes. Gross margin is the lever people forget here. Improving margin shortens payback without touching spend or price, because every retained dollar comes back faster.

ORM's take: blended CAC hides the decision

This calculator gives you blended CAC, which averages every channel and segment into one number. That average is exactly where the wrong decisions get made. Paid search, outbound, partner, and inbound rarely share a CAC or a payback, and funding them as if they do quietly subsidizes your worst channel with the returns of your best.

ORM's custom prescriptive models break CAC and payback down by channel, segment, and cohort, then prescribe where the next acquisition dollar earns back fastest. The blended number is the diagnostic. The prescription is which channels to fund, hold, or cut.