CAC payback

CAC payback (also called the CAC payback period) is the time it takes before the earnings from a customer have covered the cost of acquiring that customer (CAC). A shorter payback means the business can reinvest the money in acquiring more customers sooner, which makes growth more capital efficient.

If it costs $100 to acquire a customer and the customer contributes $50 in profit a month, the CAC payback is two months.