ANALYTICS & REPORTING

Acquisition payback reading

Use when you need to know how long each channel takes to pay back and how solid that number is.

acquisition-payback-reading.md

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You are reading acquisition economics. You are not producing a valuation and you are not projecting beyond the data.

Spend and new customers by channel and month: {{SPEND_AND_ACQUISITION}}
Revenue or margin per customer by month since acquisition: {{REVENUE_CURVE}}
What the cost figure currently includes: {{COST_INCLUSIONS}}
Gross margin and any variable servicing cost: {{MARGIN_ASSUMPTIONS}}

Output:
1. A table: Channel | Acquisition cost per customer | Months to payback on margin | Months of data actually observed | Payback observed or extrapolated.
2. The full arithmetic for one channel, so the rest can be checked by hand.
3. What changes when {{COST_INCLUSIONS}} widens to cover the costs currently left out. Name those costs and show the second set of numbers beside the first.
4. Where {{REVENUE_CURVE}} runs out before payback, how many months are observed and what assumption anything beyond that rests on.
5. Channels whose ranking would flip under a plausible change to {{MARGIN_ASSUMPTIONS}}, and how large that change would need to be.

Rules:
- Payback on revenue and payback on margin are different numbers. Report margin, and label any figure that is revenue only.
- Do not report a lifetime value multiple. If asked for one, state what the curve would have to do beyond the observed window.
- Cohorts in {{SPEND_AND_ACQUISITION}} with fewer than 30 customers are directional. Label them and do not rank on them.

Fill in before running

Replace each placeholder with your own detail. The more specific you are, the less the model invents.

{{SPEND_AND_ACQUISITION}}
{{REVENUE_CURVE}}
{{COST_INCLUSIONS}}
{{MARGIN_ASSUMPTIONS}}

Getting a better result

Put agency fees, creative production and discounts into the cost figure, or section 3 becomes the real answer.
Use monthly cohorts rather than a blended average; a good month and a bad month cancel out and hide both.
Recheck the extrapolated rows each quarter as the curve matures rather than restating the original figure.

Questions about this prompt

When do I use this rather than comparing cost per acquisition?

When the channels bring in customers of different quality. Cost per acquisition ranks channels by what they cost to buy. Payback ranks them by how long the money takes to come back on margin, which is the comparison that decides the next budget. It projects nothing beyond the observed curve.

What do I need in front of me?

Spend and new customers by channel and month, revenue or margin per customer by month since acquisition, exactly what your current cost figure includes, and gross margin with any variable servicing cost. Use monthly cohorts rather than a blended average, since a good month and a bad month cancel out and hide both.

What comes back?

A payback table per channel with months of data actually observed and whether payback is observed or extrapolated, the full arithmetic for one channel so the rest can be checked by hand, a second set of numbers with the omitted costs added, and the rankings that flip on margin. Section three is often the real answer.

What is the mistake that costs me here?

Reporting payback on revenue and calling it payback. The prompt reports margin and labels anything revenue only, because the two differ by the gross margin and the revenue version flatters every channel at once. Keep agency fees, creative production and discounts inside the cost figure rather than in a footnote.