How it works
Acquisition cost is divided by monthly customer contribution, using margin-adjusted contribution rather than revenue alone. This form solves for contribution margin; enter the known quantities in Customer acquisition cost (same currency), Payback period, Monthly customer revenue (same currency).
Inputs and units
| Input | Example value | What to enter |
|---|---|---|
| Customer acquisition cost (same currency) | 500 | Formula symbol: cac. Enter a numeric value. Must be greater than zero. |
| Payback period | 10 mo | Formula symbol: months. Required unit: mo. Must be greater than zero. |
| Monthly customer revenue (same currency) | 100 | Formula symbol: revenue. Enter a numeric value. Must be greater than zero. |
Worked example
Show example inputs and results
This example is generated by the same calculation engine using the starting values in the form. Your own inputs produce your own result.
- Customer acquisition cost (same currency)
- 500
- Payback period
- 10 mo
- Monthly customer revenue (same currency)
- 100
Complete example results
- Contribution margin
- 50 %
Reading the result
The result solves for contribution margin from the entered quantities. Check the result unit and the formula conditions before using it.
Questions and answers
Can I use the example values for my own calculation?
The example values illustrate the calculation. Replace every input with your own information, especially dates, rates and the selected operation.
When can I use the contribution margin result?
Revenue and margin stay constant; churn, financing, discounting and late payment are excluded. The result is a simple time equivalent. All monetary inputs must use the same currency; currency conversion, tax and automatic fees are excluded.
Why are some results rounded?
Results display up to 8 decimal places. Calculations use the unrounded values; very small values use scientific notation. JavaScript floating-point arithmetic can introduce tiny rounding differences.
Are my inputs sent to a server?
The calculator processes inputs in your browser. Its code does not send your values to a server.
Method sources: openstax.org