CAC Payback by Cohort

Group customers by first-order period, calculate the cumulative net revenue earned by each checkpoint, subtract product, fulfillment, payment, refund, return, and incremental service costs, then compare the resulting contribution with new-customer CAC.

Cumulative contribution by day N = cumulative net revenue - cumulative variable costs

Payback = first mature checkpoint where cumulative contribution is at least CAC

Do not call a 365-day observation “lifetime value.” State the exact window and retain a profit buffer before turning contribution into allowable CAC.

1. Define a new customer consistently and assign each customer to the period of the first order.
2. Include only orders from those customers in the 30/60/90/180/365-day windows after acquisition.
3. Use net revenue after discounts, cancellations, and mature refunds.
4. Subtract variable costs from every included order, not just the first order.
5. Allocate acquisition spend to the same new-customer cohort and date basis.
6. Wait until each checkpoint is observable; a cohort acquired 45 days ago has no mature 90-day value.

Input shape: Checkpoints are cumulative totals, not contribution earned during each interval. They should normally be nondecreasing. A decline can be real when later refunds or costs outweigh new contribution, but it should be investigated before using a first-payback label.

With a $15 retained-profit requirement by day 365, allowable CAC is $118 - $15 = $103. Actual $70 CAC pays back at the first measured checkpoint above $70: day 90.

• Show “Beyond 365 days” when the selected window never covers CAC.
• Do not extrapolate missing checkpoints with a generic repeat-purchase rate.
• Segment channels, products, regions, or customer types only when sample size and cost allocation remain credible.
• Re-run older cohorts when late refunds, chargebacks, or data corrections arrive.
• Separate contribution payback from cash collection timing when payment terms or inventory financing matter.

• Google Analytics ecommercePurchase, item, and refund event fields. Checked August 20, 2026.
• Shopify customer reportsCustomer reporting context and cohort inputs. Checked August 20, 2026.