Break-even ROAS calculator for telehealth

Break-even ROAS is the return on ad spend at which a new patient pays back exactly what you spent to get them, with nothing left over. Below it, every sale loses money once ads are counted. Above it, ads are adding profit.

Most break-even calculators only ask for price and product cost. A telehealth order has more cost lines than that, so this one asks for each of them:

• Net revenue = first-order revenue x (1 - refund and chargeback rate)
• Variable cost = medication cost + consult cost + pharmacy fee + shipping + first-order revenue x payment processing rate
• Contribution margin = net revenue - variable cost
• Break-even CPA = contribution margin
• Break-even ROAS = first-order revenue / break-even CPA
• Target CPA = break-even CPA - first-order revenue x target profit margin
• Target ROAS = first-order revenue / target CPA

Break-even CPA is the most you can pay for a patient and still break even. Target CPA is lower, because it keeps the profit margin you asked for.

Lifetime mode multiplies the per-order contribution margin by the number of orders you expect from one patient. That is the right number when you are willing to lose money on the first order and earn it back on refills. ROAS in lifetime mode is still measured on first-order revenue, because that is what Ads Manager reports in the first days after a purchase.

A brand charges 199 USD for the first month. Medication costs 45 USD, the consult 25 USD, the pharmacy fee 10 USD and shipping 8 USD. Payment processing is 3% and refunds plus chargebacks are 5% of revenue. No target margin.

Any campaign returning less than 2.09x on the first order loses money on that order. With a 15% target margin, target CPA would fall to 65.23 USD and target ROAS would rise to 3.05x.

These numbers illustrate the formula. They are not benchmarks; enter your own.

• Count the consult. Many telehealth brands pay a clinician or platform partner per visit whether or not a prescription is written. If some visits end without a prescription, spread that cost over the patients who do convert.
• Refunds and chargebacks are higher in subscription health than in most retail. Use your own rate from the last few months, including patients refunded after the provider declined them.
• Payment processing for telehealth is often priced above standard card rates. Check your processor statement rather than assuming a default.
• If the contribution margin is zero or negative, no ROAS breaks even on the first order. The calculator says so instead of showing a meaningless number. Lifetime mode shows whether refills recover it.
• Use the same revenue definition as your ad platform. If Ads Manager reports purchase value net of discounts, enter first-order revenue net of discounts here too.

Break-even ROAS tells you the floor. Whether you reach it depends mostly on the ads: a new angle can change ROAS more than any budget change. See how we make ads in batches.