Is each subscriber profitable?
Enter what a customer pays, your margin, churn and what it costs to win one, to see what each customer is worth and how soon they pay back.
Your answer
Enter what a customer pays, your gross margin, your monthly churn and what it costs to win a customer.
About this calculator
For any business paid by subscription or membership: software, boxes, gyms, clubs, maintenance plans. It answers whether each customer makes you more than they cost to win, and how long your cash is tied up before they do.
It works on cash and gross margin, not booked revenue or profit after overheads. Use figures without VAT if you're VAT-registered.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
A customer stays 1 ÷ churn months on average, so 4% churn a month means about 25 months. Lifetime value is the gross margin they bring in over that time: margin a month ÷ churn. If your customers spend more over time, we allow for that too.
We then compare it with what it costs to win a customer, work out how many months of margin pay that back, and follow 100 customers for 24 months, allowing for the ones who leave, to show when the group is in the black.
A common rule of thumb is lifetime value at least 3 times the cost to win a customer, and that cost back within 12 months. They're rough guides, not rules: a business with cash in the bank can wait longer.
Worked example
Yes: each customer brings in £1,000 of gross margin over their life, 3.3 times the £300 it costs to win them.
Amounts without VAT · cash, not booked revenue · churn and margin stay the same
| Average revenue per customer a month (without VAT) | £50 |
|---|---|
| Direct costs (20% of revenue: hosting, payment fees, support) | − £10 |
| Gross margin per customer a month (80%) | £40 |
| Customer lifetime: 1 ÷ 4% churn a month | 25 months |
| Lifetime value (LTV): margin a month ÷ churn = £40 ÷ 4% | £1,000 |
| Lifetime value against the cost to win a customer (LTV:CAC): £1,000 ÷ £300 (rule of thumb: 3 or more) | 3.3 to 1 |
| Months to earn back the cost to win (CAC payback): £300 ÷ £40 a month (rule of thumb: 12 months or less) | 7.5 months |
| Winning 100 customers: 100 × £300 | − £30,000 |
| Month 1: 100 customers left, cash so far | − £26,000 |
| Month 3: 92 customers left, cash so far | − £18,474 |
| Month 6: 82 customers left, cash so far | − £8,276 |
| Month 9: 72 customers left, cash so far | £747 |
| Month 12: 64 customers left, cash so far | £8,729 |
| Month 15: 56 customers left, cash so far | £15,791 |
| Month 18: 50 customers left, cash so far | £22,040 |
| Month 21: 44 customers left, cash so far | £27,568 |
| Month 24: 39 customers left, cash so far | £32,459 |
| The 100 customers have earned back what they cost to win by month | Month 9 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Why does the group of 100 take longer to pay back than one customer?
Payback assumes a customer who stays. In the group, some leave before they've paid back what they cost to win, so the others have to make up for them.
Do annual plans change lifetime value?
Lifetime value here is on monthly terms. Annual plans bring the cash in sooner, so they shorten payback and lift the cash curve, but any discount comes off your margin.
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