CAC Payback Period Calculator
How long does it take to earn back your ad spend? Find out your break-even point.
Profitability Timeline
First Order Profit/Loss
+$0.00
(Available Profit to cover overhead)Great job! You are profitable on the first order.
Calculation: It takes 0 purchases (with $0.00 margin each) to cover your $45 ad cost. This emphasizes why retention is critical for profitability.
What is CAC Payback Period?
The CAC Payback Period is the number of months it takes for your company to earn back the money spent on acquiring a single new customer.
In the world of rising ad costs, this is often the "make or break" metric. If your payback period is too long (e.g., > 12 months), you may run out of cash before you become profitable.
How to Shorten Your Payback Period
You have two main levers:
- Decrease CAC: harder to do with rising competition on Meta/Google.
- Increase LTV (recommended): Get the customer to buy again, sooner.
By focusing on retention mechanisms like loyalty points, VIP tiers, and email flows, you encourage the second purchase to happen in Month 1 or 2 instead of Month 6. This dramatically shortens your payback period and frees up cash to acquire more customers.
Industry Benchmarks
- 0 Months: Profitable on first order (Ideal)
- < 6 Months: Healthy growth
- 6-12 Months: Acceptable for high-growth, venture-backed brands
- > 12 Months: Dangerous territory (cash flow risk)
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