CAC Payback Period Calculator

How to Use This Calculator

1. Enter CAC and monthly gross profit per customer (ARPU × GM%) for instant payback.
2. Use By Segment tab to compare SMB, mid-market, and enterprise paybacks side by side.
3. Use Compare Cohorts to track payback trends across 3 acquisition periods.
4. Switch to Professional for churn-adjusted payback, NPV payback, and loss-if-churn analysis.

Formula

Example

Frequently Asked Questions

• What is CAC payback period? ▼
  CAC Payback Period = CAC / Monthly Gross Profit per Customer. It measures how many months of gross profit are needed to recover the cost of acquiring a customer. Shorter is better.
• What are the benchmark payback periods by segment? ▼
  SMB SaaS: under 12 months. Mid-market: 12–18 months. Enterprise: 18–24 months. Beyond 24 months is considered long and risky, especially with any customer churn.
• Why does churn matter for payback period? ▼
  If a customer churns before you recover their CAC, you lose money on that customer. With 2% monthly churn, about 33% of customers churn within 18 months — so even a "normal" payback period exposes significant revenue risk.
• What is discounted payback period? ▼
  Discounted (NPV-adjusted) payback applies a discount rate to future cash flows, reflecting that money received later is worth less. It gives a more conservative estimate of how long it truly takes to recover CAC in present-value terms.
• How do I reduce CAC payback period? ▼
  Three levers: (1) Reduce CAC — improve conversion rates, optimize channels, shift to lower-cost acquisition. (2) Increase ARPU — upsell, annual contracts. (3) Improve gross margin — reduce COGS, automate support, renegotiate vendor contracts.

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