Muze AIDefinition
Payback period is how long the gross profit from a customer takes to repay what you spent acquiring them. Spending $60 to acquire a customer who returns $20 of gross profit a month gives a three-month payback. It governs how fast you can scale, because it sets how long your cash is tied up before it can be spent again.
How it is calculated
Payback period = CAC ÷ Gross profit per customer per period
What to know
Two businesses with identical LTV and identical CAC can have completely different growth ceilings. The one that recovers its acquisition cost on the first order reinvests every month. The one that waits nine months needs financing to grow at the same rate.
We will not publish a target payback window. What counts as acceptable depends on your cash position, your cost of capital and how reliable the repeat behaviour is, and a number that is comfortable for a funded business can bankrupt a self-funded one.
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