# How To Calculate Cost of Acquisition Payback in Microsoft Dynamics | Arithmix

Learn how to calculate the cost of acquisition payback in Microsoft Dynamics with our comprehensive guide. Discover the steps and tools needed to accurately determine your ROI and make informed business decisions.

Calculating the cost of acquisition payback is an important financial metric that helps businesses determine the amount of time it will take to recover the cost of acquiring a new customer. This metric is especially useful for businesses that rely on recurring revenue streams, such as subscription-based services or products. By calculating the cost of acquisition payback, businesses can better understand their customer acquisition costs and make informed decisions about their marketing and sales strategies.

## What Is Cost of Acquisition Payback?

The cost of acquisition payback is a financial metric that calculates the amount of time it takes for a business to recover the cost of acquiring a new customer. This metric takes into account the total cost of acquiring a customer, including marketing and sales expenses, and compares it to the revenue generated by that customer over a set period of time. The result is expressed as a ratio, with the numerator representing the cost of acquisition and the denominator representing the revenue generated by the customer.

For example, if a business spends \$100 to acquire a new customer and that customer generates \$50 in revenue per month, the cost of acquisition payback would be calculated as follows:

Cost of Acquisition Payback = \$100 / (\$50/month) = 2 months

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

## When Is It Valuable To Calculate Cost of Acquisition Payback?

Calculating the cost of acquisition payback is valuable for any business that relies on recurring revenue streams, such as subscription-based services or products. By understanding the cost of acquiring a customer and the time it takes to recover that cost, businesses can make informed decisions about their marketing and sales strategies. For example, if the cost of acquisition payback is too high, a business may need to adjust their pricing or marketing strategies to attract more profitable customers.

Additionally, calculating the cost of acquisition payback can help businesses determine the lifetime value of a customer. By understanding how long it takes to recover the cost of acquiring a customer and how much revenue that customer generates over time, businesses can make more accurate predictions about their future revenue streams and make informed decisions about their investments in customer acquisition.

In conclusion, calculating the cost of acquisition payback is an important financial metric that can help businesses make informed decisions about their marketing and sales strategies. By understanding the cost of acquiring a customer and the time it takes to recover that cost, businesses can better manage their customer acquisition costs and make more accurate predictions about their future revenue streams.

## How Do You Calculate Cost of Acquisition Payback in Microsoft Dynamics

Microsoft Dynamics itself isn’t naturally geared towards letting you calculate complex metrics like Cost of Acquisition Payback. As an alternative, teams typically use products like Arithmix to import data from Microsoft Dynamics 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 Microsoft Dynamics, combine it with data from other systems, and create calculations like Cost of Acquisition 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.