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Metrics

Payback Period

The number of months required for a customer's gross margin contribution to equal the initial cost of acquiring that customer.

Payback Period is typically calculated as Customer Acquisition Cost (CAC) divided by the monthly gross margin per customer. A shorter payback period (e.g., less than 12 months) indicates efficient customer acquisition and faster return on investment. It is a key metric for assessing the sustainability of a company's growth.
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