Unit economicsMetric 15 of 35

CAC Payback

Months until a new customer pays back what you spent to land them.

How many months a new customer takes to repay the cost of acquiring them, on a gross-margin basis. Critical for cash-constrained startups — a great LTV:CAC means nothing if payback is 4 years and you have 12 months of runway.

Formula

CAC Payback = CAC ÷ (ARPU × Gross Margin)

Worked example

CAC $1,200, ARPU $200, margin 80% → Payback = 1,200 ÷ (200 × 0.80) = 7.5 months.

Illustrative comparisons

B2B SaaS

These unsourced ranges are illustrative scenarios, not measured industry benchmarks, percentiles or recommended targets. Their qualitative labels are editorial interpretations. Compare your own cohorts using the same segment, period, currency and measurement basis.

Excellent

< 12 months

Healthy

12–18 months

Cash risk

> 24 months

Why it matters

CAC payback is the bridge between unit economics and cash flow. A 36-month payback with 12 months of runway is structural insolvency, regardless of LTV. Investors increasingly index on CAC payback over LTV:CAC because it's harder to game.

Common mistakes

Calculating payback on revenue instead of gross profit — understates the payback period (6 instead of 7.5 months in this example).
Annualising rather than computing month-by-month, which loses early-period detail.

Track CAC Payback in FlowMRR