How To Calculate Cost of Acquisition Payback in Workday | Arithmix

Calculating the cost of acquisition payback is a crucial step in determining the financial success of a business. It helps businesses understand how long it will take to recoup the costs of acquiring a new customer or client. This metric is particularly important for businesses that rely on recurring revenue streams, such as subscription-based services or those that require long-term contracts.

The cost of acquisition payback is calculated by dividing the total cost of acquiring a new customer by the revenue generated by that customer over a specific period. This period can vary depending on the business, but it is typically one year. The resulting number represents the number of months it will take for the business to recoup the cost of acquiring that customer.

What Is Cost of Acquisition Payback?

The cost of acquisition payback is a metric used to determine the financial success of a business. It is calculated by dividing the total cost of acquiring a new customer by the revenue generated by that customer over a specific period. This metric is particularly important for businesses that rely on recurring revenue streams, such as subscription-based services or those that require long-term contracts.

By calculating the cost of acquisition payback, businesses can determine how long it will take to recoup the costs of acquiring a new customer. This information can be used to make informed decisions about marketing and sales strategies, as well as to evaluate the overall financial health of the business.

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 or long-term contracts. This includes businesses in industries such as software as a service (SaaS), telecommunications, and financial services.

By understanding the cost of acquisition payback, businesses can make informed decisions about marketing and sales strategies. For example, if the cost of acquisition payback is longer than expected, the business may need to adjust its pricing or marketing strategies to attract more profitable customers.

Additionally, calculating the cost of acquisition payback can help businesses evaluate the overall financial health of the business. By comparing the cost of acquisition payback to other financial metrics, such as revenue growth and profit margins, businesses can gain a better understanding of their financial performance and make informed decisions about future investments and growth strategies.

How Do You Calculate Cost of Acquisition Payback in Workday

Workday 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 Workday 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 Workday, 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.

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

Calculating Cost of Acquisition Payback in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your Workday 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.