Glossary term
CAC Payback Period
The number of months for a customer's gross profit to recover their acquisition cost; under 12 months is excellent, over 24 is problematic.
CAC Payback Period is the number of months it takes for a customer's gross profit to recover the cost of acquiring them. Under 12 months is considered excellent, 12-18 months healthy, and over 24 months a warning that growth is being bought inefficiently. It is often a more intuitive efficiency gauge than LTV/CAC because it directly measures capital recovery speed. See CAC and SaaSpocalypse 101.