# How To Calculate Cost of Acquisition Payback in Sage CRM | Arithmix

Learn how to calculate the cost of acquisition payback in Sage CRM with our step-by-step guide. Improve your business decision-making and optimize your marketing strategies with this essential tool.

Calculating the cost of acquisition payback is an important step in determining the profitability of your business. It is a financial metric that measures the time it takes for a company to recover the costs associated with acquiring a new customer. This metric is essential for businesses that want to determine the effectiveness of their marketing and sales efforts.

The cost of acquisition payback is calculated by dividing the total cost of acquiring a new customer by the revenue generated from that customer. This calculation provides a clear picture of how long it will take for a business to recoup the costs of acquiring a new customer.

## What Is Cost of Acquisition Payback?

The cost of acquisition payback is a financial metric that measures the time it takes for a business to recover the costs associated with acquiring a new customer. This metric is essential for businesses that want to determine the effectiveness of their marketing and sales efforts. It is calculated by dividing the total cost of acquiring a new customer by the revenue generated from that customer.

For example, if a business spends \$1,000 to acquire a new customer and that customer generates \$2,000 in revenue, the cost of acquisition payback would be 0.5. This means that it would take the business 0.5 months to recoup the costs of acquiring that customer.

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

Calculating the cost of acquisition payback is valuable for businesses that want to determine the effectiveness of their marketing and sales efforts. It provides a clear picture of how long it will take for a business to recoup the costs of acquiring a new customer, which is essential for making informed decisions about marketing and sales strategies.

By calculating the cost of acquisition payback, businesses can determine which marketing and sales channels are the most effective at acquiring new customers. This information can be used to optimize marketing and sales strategies, which can lead to increased revenue and profitability.

Additionally, the cost of acquisition payback can be used to determine the lifetime value of a customer. By understanding how long it takes to recoup the costs of acquiring a new customer, businesses can determine how much revenue that customer is likely to generate over their lifetime. This information can be used to make informed decisions about customer acquisition and retention strategies.

In conclusion, calculating the cost of acquisition payback is an essential step for businesses that want to determine the effectiveness of their marketing and sales efforts. By understanding how long it takes to recoup the costs of acquiring a new customer, businesses can make informed decisions about marketing and sales strategies, and optimize their efforts for increased revenue and profitability.

## How Do You Calculate Cost of Acquisition Payback in Sage CRM

Sage CRM 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 Sage CRM 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 Sage CRM, 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.