Cohort Payback Curve

Metric

A cohort payback curve plots cumulative contribution per acquired customer against months since acquisition, one line per acquisition cohort. Payback is the month the curve crosses CAC.

What is Cohort payback, in plain English?

Group January's new customers and watch what they paid you over time; do the same for February. The month each group's running total covers what you paid to acquire them is the payback — separate stories for acquisition quality (starting depth) and retention quality (slope).

How do you calculate Cohort payback?

Payback month = first age_month where cumulative contribution per customer >= CAC

Cohort payback example

A January cohort pays back in month 4 and keeps climbing (subscription-like); a March cohort never crosses zero. Blended ROAS called both months identical at 2.1x — the curves say scale January's source and kill March's.

Common Cohort payback mistakes

Compare cohorts only at equal ages, keep churned customers in the denominator (dropping them is a tautology), and never extrapolate young censored cohorts from hope. Below ~15% repeat revenue, this machinery is overkill — contribution-margin ROAS suffices.

Related terms