1. Finance
  2. Customer & Market Economics

Customer Acquisition Cost Payback Period

Time

Time it takes to earn back the Customer Acquisition Cost (CAC) through customer spending. Shows how long it takes for an investment in acquiring a customer to become profitable.

Formula

CAC / Monthly Gross Margin per Customer

Example

If the CAC is $300 and monthly gross margin per customer is $100, the payback period is 3 months.