CAC Payback Period Calculator
CAC Payback Period turns acquisition cost into a timeline: how long before a new customer's gross profit covers what it cost to win them.
Order Economics
Purchase Frequency
Acquisition
CAC Payback Period
What This Means
CAC works out to $500.00 (from $25000 spend over 50 new customers), and monthly gross profit per customer is $51.00. Most SaaS and DTC businesses target 12 to 18 months or shorter.
The Formula
CAC Payback Period = (Total Sales & Marketing Spend / New Customers Acquired) / ((AOV − COGS − Shipping − Payment Fees) × Orders per Month)
This is the standard CAC Payback Period formula (CAC divided by monthly gross profit), just built up from raw spend, customer counts, and per-order costs instead of asking you to already know your CAC or gross margin.
Why It Matters
A raw CAC dollar figure doesn't say much about cash risk on its own. Payback period does, since every customer effectively requires the business to front cash until they cross this line. Building it from raw spend and per-order costs, rather than a pre-known CAC and margin, also shows exactly which lever to pull if payback is too slow, lower acquisition spend, raise order frequency, or cut a specific cost line.
Example
A company spends $25,000 on sales and marketing to acquire 50 new customers, a $500 CAC. Those customers buy at a $60 AOV with $18 in COGS, $6 in shipping, and $2 in payment processing per order, leaving $34 in gross profit per order, and they order about 1.5 times a month, for $51 in monthly gross profit. Payback period is $500 divided by $51, which equals about 9.8 months.
Frequently Asked Questions
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