How do you calculate CAC payback period?
CAC payback period estimates how many months of gross profit are needed to recover the cost of acquiring one customer.
Formula: CAC ÷ (monthly ARPU × gross margin as a decimal).
Example: if CAC is $600, monthly ARPU is $100 and gross margin is 80%, payback is 600 ÷ (100 × 0.80) = 7.5 months.
Calculate the acquisition input with the CAC Calculator, then compare it with your retention period.
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