How To Calculate CAC Payback in HubSpot CRM | Arithmix

Calculating CAC payback is an essential metric for any business that wants to understand how long it takes to recover the cost of acquiring a new customer. This metric is particularly important for businesses that operate on a subscription model or have a high customer acquisition cost. CAC payback is a measure of the time it takes to recover the cost of acquiring a new customer, and it is calculated by dividing the cost of acquiring a new customer by the revenue generated from that customer over a given period.

What Is CAC Payback?

CAC payback is a metric that helps businesses understand how long it takes to recover the cost of acquiring a new customer. This metric is calculated by dividing the cost of acquiring a new customer by the revenue generated from that customer over a given period. The period used for calculating CAC payback can vary depending on the business, but it is typically between 6 and 12 months. The lower the CAC payback period, the better, as it means that the business is recovering its customer acquisition costs more quickly.

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 2 months. This means that it would take 2 months for the business to recover the cost of acquiring that customer.

When Is It Valuable To Calculate CAC Payback?

CAC payback is a valuable metric for any business that wants to understand how long it takes to recover the cost of acquiring a new customer. This metric is particularly important for businesses that operate on a subscription model or have a high customer acquisition cost. By calculating CAC payback, businesses can determine how long it takes to recover their customer acquisition costs and make informed decisions about their marketing and sales strategies.

For example, if a business has a high CAC payback period, it may need to re-evaluate its marketing and sales strategies to reduce its customer acquisition costs. Alternatively, if a business has a low CAC payback period, it may be able to invest more in customer acquisition to grow its customer base more quickly.

Overall, calculating CAC payback is an essential metric for any business that wants to understand the cost of acquiring new customers and make informed decisions about its marketing and sales strategies. By understanding CAC payback, businesses can optimize their customer acquisition costs and grow their customer base more effectively.

How Do You Calculate CAC Payback in HubSpot CRM

HubSpot CRM 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 HubSpot CRM and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers you'll powerful yet easy to use. With Arithmix you can import data from systems like HubSpot CRM, 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 HubSpot CRM 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 HubSpot CRM 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.