What is a customer worth, and how fast does each channel pay back?

How it works

The customers. A subscription software company with three plans, Starter at €29 a month, Growth at €99 and Scale at €299, after a one-month free trial that 25% of sign-ups convert from. Every customer starts on Starter. 600 trials start each month, from four channels, and each channel’s sign-ups in a month form a cohort: the model follows it month by month as customers pay, move plan, leave, and some come back within a year. The history is 36 monthly cohorts, from September 2023’s sign-ups to August 2026’s, each followed to the end of September 2026.

Retention. The share of a cohort’s paying customers still paying a given number of months after their first payment. A customer who left and came back counts as paying again.

Lifetime value. The gross margin a customer brings in over their first 24 months of paying: each month’s revenue per customer won, times the 80% gross margin, added up. It is counted on gross margin, not revenue, because the 20% that serving a customer costs is not there to repay acquisition. It is per customer won, so a customer who left counts €0 from then on, and one who moved up counts at the higher price.

Payback. Payback months = acquisition cost ÷ (monthly revenue per customer × gross margin), with the revenue counted on the cohort’s surviving customers: the first month in which the gross margin per customer won adds up to what a customer cost to win. The simple version of the formula holds every customer at €29 a month, as if nobody left. For paid social it gives 24 months; counted on the customers who stay, paid social does not pay back within two years.

Pooling the cohorts. Each month of a channel’s curve pools every cohort old enough to have reached it: month 1 counts all 36 cohorts, month 24 the 13 oldest. The newest cohorts speak only for the first months.

What it does not cover. The cost to win a customer is each channel’s spend over the customers it won: brand spend, and customers who would have come without the channel, are outside it. It is the average customer’s cost, not what the next one would cost on a bigger budget. Margin after 24 months is not counted, and later margin is not discounted.

The same company elsewhere. The revenue forecast demo runs this company’s revenue forward from September 2026 on the same model.