The starting point
The calculator asks what the full offer costs and how much profit one new customer produces. It uses profit rather than sales revenue because revenue includes money needed to deliver the job or product.
Break-even customers = total marketing cost ÷ first-sale profit per customerTotal cost
Total cost includes setup fees, recurring fees, media spend when applicable, and the value of owner time when entered. A pay-per-lead offer uses lead price multiplied by monthly lead volume.
Total cost = setup + recurring cost across the term + owner timeTiming and active months
A ramp-up reduces the number of months available to earn back the cost. The calculator rounds the customer requirement up to a whole person. It also rounds the monthly target up so the displayed target is enough to reach break-even.
Customers per active month = break-even customers ÷ (term months − ramp months)Leads and close rate
Close rate is the share of leads that become paying customers. The tool converts the customer target into a lead target using the rate you enter. It does not supply an industry benchmark.
Break-even leads = break-even customers ÷ close rateMaximum lead cost = first-sale profit × close rateFirst sale and repeat business
The conservative result counts only profit from the first sale. The repeat-business result multiplies that profit by purchases per year and years retained. Use the extended result only when your records support those assumptions.
ROAS and acquisition cost
Break-even ROAS = 1 ÷ profit share of revenueAcquisition cost = full marketing cost ÷ new paying customersROAS describes sales revenue per dollar of ad spend. It is not the same as profit or a complete return on investment calculation.
Promises, payback, and verdicts
The payback chart appears only when a measurable promise is entered. Without one, the tool shows a break-even requirement but does not pretend the offer will deliver it.
| Promised delivery compared with break-even | Verdict |
|---|---|
| At least 2 times break-even | Worth it, with room to spare |
| 1 to under 2 times | Worth it if they deliver |
| 0.7 to under 1 times | Borderline |
| Under 0.7 times | Hard to justify |
Limits of the result
- The result is an estimate based on the numbers entered.
- It does not account for taxes, financing, refunds, seasonality, or every operating cost.
- Attribution can be imperfect when several channels influence one customer.
- A vendor promise is not a guarantee.
- The tools are for planning and are not financial advice.
Who created it
Paul Watley, a Director of SEO, created the calculators to make marketing offers easier to evaluate with business numbers rather than channel metrics alone.
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