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Recipe

CAC payback period

How many months until a customer pays back what you spent to acquire them. The heartbeat metric for capital-efficient growth.

Formula

CAC Payback = CAC ÷ (MRR per customer × Gross Margin %)

Result is in months. A healthy SaaS aims for under 12 months; elite teams target 5–7.

Worked example

  • CAC (sales + marketing per new logo)$4,500
  • MRR per customer$750
  • Gross margin80%
  • Payback period7.5 months

Why it matters

Payback is the bridge between sales efficiency and runway. If your payback exceeds the cash you have on hand, you are funding customer acquisition with venture debt — not revenue. Shorten payback by raising prices, reducing sales-cycle bloat, or shifting to product-led onboarding.

← LTV:CAC ratioNet revenue retention →