How to calculate CAC Payback Period
CAC payback period is how many months of gross profit from a new customer it takes to recover the cost of acquiring them.
Formula
Payback months = CAC ÷ (monthly ARPU × gross margin %)SQL query
This example assumes: figures from your CAC and ARPU queries; gross margin as a constant. It is written in PostgreSQL syntax; date functions differ slightly in MySQL, BigQuery and SQLite, and your column names will differ from these.
SELECT cac / NULLIF(arpu * 0.80, 0) AS payback_months -- 0.80 = assumed gross margin
FROM (SELECT 420.0 AS cac, 65.0 AS arpu) AS inputs;Common mistakes that make CAC Payback Period wrong
- Use gross margin, not revenue, or payback looks shorter than it is.
- New-customer ARPU can differ a lot from the average; use new customers' own ARPU.
- Annual prepayment shortens cash payback even when the formula result is unchanged.
Ask for CAC Payback Period in plain English
Instead of writing the query yourself, you can type the question. SchemaChat turns it into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. It does not replace your judgement about the definition: check that the query matches the formula your business uses.
- What is our CAC payback period by channel?
- How long does it take to recover acquisition cost for enterprise customers?