CAC Recovery with Churn Calculator
Find out how long it really takes to recover customer-acquisition cost once monthly churn is thinning your cohort.
How it works
Contribution = ARPA × margin · Cumulative = contribution × (1−(1−churn)^t) ÷ churn · payback = t where cumulative = CAC
A simple payback of CAC ÷ monthly contribution assumes every acquired customer stays forever. In reality a cohort shrinks each month at the churn rate, so later months bring in less than the first — stretching the true payback period. If churn is high enough that lifetime value falls below CAC, the acquisition cost is never fully recovered no matter how long you wait; this calculator flags that case explicitly.
Worked example
A $1,000 CAC on customers paying $100/month at an 80% gross margin contributes $80 per month, a 12.5-month simple payback. At 3% monthly churn the cohort decays, so cumulative contribution reaches $1,000 only around month 15.4. Lifetime value is $80 ÷ 0.03 ≈ $2,667, an LTV:CAC of about 2.7:1.
Frequently asked questions
Why is churn-adjusted payback longer than simple payback?
Each month a slice of the cohort cancels, so the group pays you less than a full set of customers would. Recovering the same CAC from a steadily shrinking cohort therefore takes more months than the flat calculation implies.
When is CAC never recovered?
When lifetime value — monthly contribution divided by churn — is below CAC. At that point the total a customer will ever pay is less than what you spent to acquire them, so no payback period exists. That is the "never recovers" result.
What LTV:CAC ratio should I aim for?
A common benchmark for healthy SaaS is roughly 3:1 or better, with CAC recovered inside about 12 months. Below those levels, either acquisition is too expensive or retention is too weak to justify the spend.
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Educational estimate, not financial advice.