Lightdrop

One metric a week · CAC payback

Every customeris a loan.

How long until yours pay you back?

Congratulations on the new customer. You just lent them $120. That's your CAC: what it cost to get them through the door. The part nobody puts on the dashboard is how long it takes to get it back.

Run your payback
$120 to acquire. $30 a month back.

CAC $120

Mo 1 · +$30
Mo 2 · +$30
Mo 3 · +$30
Mo 4 · +$30

Paid back · Month 4

The formula

CAC payback, in months.

Payback

=

CAC

Monthly gross profit

per customer

e.g. $120 ÷ $30 = 4 months

CAC

Marketing spend ÷ new customers, over the same period. New customers only: returning buyers flatter it.

Monthly gross profit per customer

Average order × margin × orders a year, ÷ 12. Margin is what's left of each order after product costs.

Revenue tells you how big you are. Payback tells you how fast you can get bigger.

How to read it

What your number means.

  1. Under 3 mo

    Fast

    Each customer funds the next.

  2. 3–6 mo

    Healthy

    Solid for most e-commerce brands.

  3. 6–12 mo

    Slow

    Growth leans on outside cash.

  4. 12+ mo

    Cash trap

    Grow faster, run out of cash faster.

Rules of thumb for e-commerce and DTC brands. Subscription and B2B businesses usually run longer.

Run yours

Now run yours.

Five numbers you already have. The calculator works out your CAC, your monthly gross profit per customer and how many months it takes to get your money back. Nothing is saved.

Step 1 · CAC

Marketing spend
New customers
$120
CAC

Same period for both. New customers only: returning buyers flatter it.

Step 2 · Monthly gross profit per customer

Avg order
Margin
Orders / yr
÷ 12 =
$30
Per month

Margin is what's left of each order after product costs. Orders a year is how often the average customer buys.

Showing the example. Type your numbers to run yours.

Step 3 · Your payback

Example

4months

$120 CAC ÷ $30 a month

Healthy

Solid for most e-commerce brands.

Paybacks a year
3
12 ÷ your payback
All three, 10% better
3 mo
CAC, margin and orders

Shorten it

Rarely one big fix. Three levers, pulling together.

  1. 1

    Acquisition cost

    Spend less to win each new customer.

  2. 2

    Margin

    Keep more of every order you ship.

  3. 3

    The second order

    Bring customers back sooner, and more often.

Move all three by 10% and 4 months becomes 3.

Two brands, same revenue. One pays back in 3 months, the other in 14. Only one can afford to grow on its own cash.

On a revenue chart, they're twins. In the bank, they're barely related. The 3-month brand gets its cash back fast and spends it on the next customer, then the one after that. The 14-month brand is still waiting on last year's customers to pay off before it can afford new ones.

Work with Lightdrop

Want it shorter?

That's the work: acquisition, margin and the second order, run by one team instead of refereed across four vendors.

Talk to Lightdrop