How to Calculate CAC Payback Period

CAC Payback Period is an important metric because it helps a company (and investors) know how much money is needed to continue growing.

A company with a payback period of 3 months will be able to make back their investment quickly so they can re-invest in more growth without an enormous strain on their cash runway.

However, a company that has a payback period of 15 months will face a large cash burn in order to continue investing in future growth at the same rate or will have to lower the amount being invested in growth.

Let's jump into how to calculate CAC payback period and why it is important for marketing.