How long until a customer pays you back?
CAC payback gets quoted as one number assembled from a quarter of noisy inputs, and the two inputs behind it go bad together. This template measures payback the honest way, as the month a decaying cohort finally repays what it cost, then runs acquisition cost and churn as a correlated pair to give you the odds against the target your board set.
Words on this sheet
- Cohort: One group who start together and are counted together: an intake of students, a class year, or the customers who joined in the same month.
- Contribution: What is left of the income after the costs that come with it, before the fixed costs are paid.
SaaS Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
How Long Until a Customer Pays Us Back?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
At the middle of every range payback lands in month 13 and LTV to CAC is 5.6, so the point estimate looks comfortable. Across 20,000 trials it does not stay that way:
- Median payback
- 15 months
- P90
- 22 months
- Chance of clearing 18 months
- 76%
- Median LTV to CAC
- 4.3
The comfortable single number, 13 months, is two months better than the median the model actually produces, and about one cohort in four misses the 18-month bar altogether. Take the correlation out and it reads better still: P90 pulls in from 22 months to 21 and the odds of clearing the target rise from 76% to 78%, because an uncorrelated model cheerfully draws expensive acquisition alongside low churn in the same trial. That is the combination this business never gets.
The model
One acquired cohort followed for 60 months. Customers leave at the drawn churn rate, the survivors contribute gross margin on their subscription, and payback is the first month the running total covers CAC.
| Revenue per customer per month | $310 |
| Blended CAC | $2,000 - $2,700 - $4,800 (uncertain) |
| Gross margin | 68% - 78% - 84% (uncertain) |
| Monthly gross churn | 0.8% - 1.6% - 3.0% (uncertain) |
| CAC and churn | correlated at +0.55 |
| Board payback target | 18 months |
| Months to recover CAC | simulated |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
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- What does hiring now cost you next January?What Three Hiring Plans Cost
Every model like this one, and the method behind them: Monte Carlo simulation.