CAC paybackperiod
The number of months of gross profit needed to earn back the cost of acquiring a customer.
Growth Score · Unit Economics
Definition
What it means
Payback period shows how fast a new customer repays the spend that won them. Shorter periods let you reinvest sooner and need less outside cash.
Many subscription businesses aim for under twelve months.
Unit Economics
Why it matters, with an example
It tells you how long cash stays tied up in a new customer, which sets how fast you can reinvest.
For example: Winning a customer cost $150 and that customer returns $30 of gross profit a month: payback is $150 / $30 = 5 months.
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Unit Economics
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FAQ
Quick answers
What is CAC payback period?
The number of months of gross profit needed to earn back the cost of acquiring a customer.
Where does it sit in Growth Score?
It belongs to the Unit Economics pillar, one of the 12 pillars your score is built from.
What should I read next?
Start with Customer acquisition cost and Customer lifetime value, then browse the other terms in Unit Economics.
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