CAC Payback

Definitions

1. The time required for gross profit from a customer to recover the cost of acquiring that customer. Shorter CAC payback periods generally make scaling easier and less capital intensive.

   In plain English: How long it takes to earn back the money spent to acquire a customer.

   Example: "Improving retention cut CAC payback from eighteen months to ten."

Related Terms

• LTV / CAC
• Unit Economics
• Contribution Margin
• Customer Acquisition Cost
• Gross Margin
• Internal Rate of Return
• Payback Period
• Quick Ratio
• Revenue Multiple
• Rule of 40