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Metrics

CAC Payback Period

CAC Payback Period is the number of months it takes for a customer's gross margin contribution to cover the cost of acquiring that customer.

CAC Payback Period is calculated by dividing the customer acquisition cost (CAC) by the monthly gross margin per customer. It indicates how quickly a company recovers its investment in acquiring a new customer. A shorter payback period is generally better, as it frees up capital for further growth. Most healthy SaaS businesses aim for a payback period of 12 months or less.
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