CAC Payback Period: $200 CAC, $20 ARPU, 90% Margin
A low CAC of $200, $20 ARPU, and 90% gross margin yields a payback period of approximately 11 months.
How to use this tool
- Enter customer acquisition cost (cac), monthly revenue per customer (arpu) and gross margin in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your payback period and the full breakdown beneath it.
High gross margins can partially offset low ARPU — this preset models a PLG or low-touch SaaS product with lean acquisition costs.
Frequently asked questions
- What is a good CAC payback period?
- Best-in-class SaaS companies target 12 months or less. 12–18 months is acceptable for enterprise sales. Above 24 months is a warning sign — it takes too long to recover acquisition costs, which strains cash flow.
- Why include gross margin in the payback calculation?
- Because not all revenue is profit. If your ARPU is $100 but you spend $60 on hosting and support (40% margin), you only recover $40/month toward CAC. Including gross margin gives a more accurate cash-recovery picture.