CAC Payback Period

Definition

The number of months required for a customer to generate enough profit to pay back their acquisition cost. If it's over 12 months, your unit economics are questionable.

Example Usage

Our CAC payback period is 8 months, which means we recoup our acquisition spend in time to reinvest profits into growth.

Origin

SaaS efficiency metrics terminology

Fun Fact

During the venture-backed growth-at-any-cost era, startups ignored payback periods entirely

Source: SaaS efficiency metrics terminology

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