CAC Payback Period
What is CAC Payback Period?
CAC Payback Period measures how long it takes to recover customer acquisition cost from customer revenue or gross margin.
Also known as: CAC Payback
CAC Payback Period Formula
CAC Payback Period = CAC / (Monthly ARPA × Gross Margin) | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
Gross Margin | Gross margin percentage on recurring revenue. |
Monthly ARPA | Average revenue per account per month. |
Advertisement
How to Calculate CAC Payback Period
Worked example
- CAC
- $6,000
- Monthly ARPA
- $1,000
- Gross Margin
- 80%
- → CAC Payback (months)
- 7.5
CAC Payback Period Calculator
CAC Payback Period = CAC / (Monthly ARPA × Gross Margin) | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
Gross Margin | Gross margin percentage on recurring revenue. |
Monthly ARPA | Average revenue per account per month. |
Worked example
- CAC
- $6,000
- Monthly ARPA
- $1,000
- Gross Margin
- 80%
- → CAC Payback (months)
- 7.5
Enable JavaScript to use the interactive calculator.
Prefer a dedicated page? Use the CAC Payback Period calculator.
CAC Payback Period Benchmarks
| Segment | Level | Benchmark |
|---|---|---|
| general | target | 6–12 Months |
CAC Payback Period vs Related Metrics
- CAC Payback Period vs LTV to CAC Ratio — how the two differ and when each matters.