Businesssaas
CAC Payback Period Calculator
How long a customer takes to repay what they cost to win. Cash-flow reality that the LTV:CAC ratio hides. A 4× ratio over five years still starves a business of cash.
Also called: months to recover cac, cac payback period.
Months to pay back CAC
12.5
12.5 months of gross profit to recover the ₹50,000 it cost to acquire this customer.
Gross profit per month
₹4,000
Method and background
How this is calculated
Acquisition cost divided by the monthly gross profit that customer generates. It is the cash question rather than the profitability question, and the two diverge sharply when lifetimes are long: a healthy ratio with a thirty-month payback still means thirty months of funding growth out of somewhere else.
payback_months = cac / (arpu * gross_margin)- GM
- Gross margin as a decimal (decimal)