How To Calculate CAC Payback in Deltek Vision | Arithmix

Calculating CAC payback is an essential part of any business strategy. It helps you determine how long it takes for your investment in acquiring a new customer to pay off. This metric is crucial for businesses looking to grow and expand their customer base while maintaining profitability. In this article, we will discuss what CAC payback is, when it is valuable to calculate it, and how to calculate it.

What Is CAC Payback?

CAC payback is the amount of time it takes for a business to recover the cost of acquiring a new customer. This metric is calculated by dividing the total cost of acquiring a new customer by the revenue generated by that customer over a specific period. The result is the number of months it takes for the business to recover the cost of acquiring that customer.

For example, if a business spends $1,000 to acquire a new customer and that customer generates $500 in revenue per month, the CAC payback period would be two months. This means that it takes two months for the business to recover the cost of acquiring that customer.

When Is It Valuable To Calculate CAC Payback?

Calculating CAC payback is valuable for businesses that are looking to grow and expand their customer base while maintaining profitability. It helps businesses determine the effectiveness of their marketing and sales efforts and identify areas where they can improve their customer acquisition strategies.

Additionally, CAC payback is valuable for businesses that are looking to raise capital or secure financing. Investors and lenders often look at CAC payback as an indicator of a business's ability to generate revenue and maintain profitability.

How to Calculate CAC Payback

To calculate CAC payback, you will need to gather data on the total cost of acquiring a new customer and the revenue generated by that customer over a specific period. The period can be a month, a quarter, or a year, depending on your business's needs.

Once you have gathered this data, you can calculate CAC payback by dividing the total cost of acquiring a new customer by the revenue generated by that customer over the specific period. The result is the number of months it takes for the business to recover the cost of acquiring that customer.

It is important to note that CAC payback is not a one-time calculation. It should be monitored regularly to ensure that your customer acquisition strategies are effective and that your business is maintaining profitability.

Conclusion

Calculating CAC payback is an essential part of any business strategy. It helps businesses determine the effectiveness of their marketing and sales efforts and identify areas where they can improve their customer acquisition strategies. By regularly monitoring CAC payback, businesses can ensure that they are maintaining profitability while growing and expanding their customer base.

How Do You Calculate CAC Payback in Deltek Vision

Deltek Vision itself isn’t naturally geared towards letting you calculate complex metrics like CAC Payback. As an alternative, teams typically use products like Arithmix to import data from Deltek Vision and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Deltek Vision, combine it with data from other systems, and create calculations like CAC Payback.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating CAC Payback in Arithmix

Calculating metrics like CAC Payback is simple in Arithmix. Once you've created your free account, you’ll be able to import your Deltek Vision data, and use it to create natural language formulas for metrics like CAC Payback.

Arithmix is designed to give you the power to build any calculations you want on top of your Deltek Vision data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.