2 min read
Payback months = acquisition cost ÷ monthly gross profit per customer. Under 12 months is generally comfortable.
How to use it
Enter what it costs you to win one customer (sales and marketing spend divided by new customers) and the gross profit that customer brings in each month. The result is how long before that customer has paid back what you spent to acquire them.
Use gross profit, not revenue — the money left after the direct cost of serving them. A shorter payback means you can reinvest sooner and grow without running out of cash.
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Frequently asked questions
What's a good CAC payback period?
Many UK small businesses aim for under 12 months; under 6 is strong. Longer paybacks aren't fatal but they tie up cash, so you need the working capital to fund the gap.
Revenue or gross profit per customer?
Gross profit — revenue minus the direct cost of delivering to that customer. Using revenue flatters the number and hides whether the customer is actually profitable to serve.
Is this a quote?
No — it's a free illustration. Your actual Credicorp offer depends on an assessment of your company.
Related reading
Funding for UK limited companies
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