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CAC & Payback

From 'what did a customer cost?' to 'how long until they pay us back?'

One-minute refresher

  • CAC = everything you spent to acquire ÷ new customers won.
  • Fully loaded means salaries and tools count, not just ad spend.
  • Payback = CAC ÷ the margin a customer generates per month — how long you're 'underwater'.
  • A great LTV:CAC with a 2-year payback can still sink you: cash flow lives on payback.

CAC = spend ÷ new customers · Payback = CAC ÷ monthly margin

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