CAC Payback Period Calculator
CAC Payback Period measures how long it takes to recover customer acquisition cost from customer revenue or gross margin.
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
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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. |
How to Calculate CAC Payback Period
Worked example
- CAC
- $6,000
- Monthly ARPA
- $1,000
- Gross Margin
- 80%
- → CAC Payback (months)
- 7.5
Full definition, benchmarks, and common mistakes live on the CAC Payback Period glossary page.