Free tool
What is the most you can pay for an install?
Everyone measures cost per install. Far fewer know what their ceiling actually is – which is the number that tells you whether to scale a channel or shut it off.
Maximum cost per install
$2.67
Bid above this and the cohort misses your 6-month payback target.
- Max cost per trial start
- $12.13
- Max cost per paying subscriber
- $37.90
- Lifetime value at this churn
- $70.76
- LTV to CAC at the ceiling
- 1.9:1
Why the payback target belongs in this calculation
Lifetime value alone will justify almost any acquisition cost, given enough patience. A subscriber worth $80 over three years happily supports a $40 acquisition cost – on paper. In practice you pay the $40 today and collect the $80 across thirty-six months, and whether that is viable depends entirely on how much cash you can leave tied up.
Setting a payback target first, then solving for what you can pay, keeps the answer connected to your bank balance rather than to a spreadsheet.
Where these inputs usually go wrong
Churn measured too early. Month-one churn is always the worst; using it as a constant makes every product look doomed. Use a blended rate across at least three renewal cycles.
Store commission at 30% when it should be 15%. Or the reverse. Check which programme you are in – it moves the ceiling by nearly a fifth.
Trial-to-paid taken from a blended average. It varies enormously by acquisition source. Branded search converts at multiples of broad social traffic, so a blended figure will overstate your ceiling on exactly the channels where you are about to spend more.
Questions people actually ask
- Why solve for CPI rather than just measuring it?
- Because the measured number does not tell you whether to keep buying. A $4 install is good or bad only relative to what the funnel behind it converts and what your payback tolerance is. This gives you the ceiling to bid against.
- How do I use this in the ad platforms?
- Do not bid to it directly – set your bid targets on a downstream event instead. Use the maximum cost per trial start figure as your target CPA where trials are instrumented. The CPI ceiling is a sanity check on channels where nothing downstream is measurable.
- What LTV to CAC ratio should I want?
- The 3:1 rule is a rule of thumb from SaaS, not a law, and it quietly assumes a payback period nobody states. A 2:1 ratio with four-month payback is a healthier business than 4:1 with twenty-month payback, because the first one recycles cash and the second one consumes it.
- Does this handle annual plans?
- Not directly. For an annual plan, enter the monthly equivalent price and set churn to your annual renewal loss divided by twelve. It approximates. Annual plans mostly change the cash timing, which is favourable and not modelled here.
Then check it in the other direction.
The payback calculator takes your actual CPI and shows the month a cohort turns profitable. Same chain, solved the other way.