CAC payback
CAC payback is the number of months of gross margin required to recover the fully-loaded cost of acquiring a customer. It measures how quickly acquisition spend turns back into cash and is a leading indicator of capital efficiency. Efficient SaaS businesses target twelve months or less; longer paybacks demand strong retention and expansion to stay viable.
In more detail
Payback matters more than raw LTV/CAC because it drives working-capital needs. A twenty-four-month payback with great LTV can still starve a growth-stage company of cash. Health and consumer businesses must also model prior-authorization, refill timing, and refund windows into the calculation.
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