CAC payback is the number of months it takes to pay off the cost of acquiring a customer and to start making a profit from that customer.
CAC = Customer Acquisition Cost
It’s a measure of cash burn per customer - how much capital your business needs to survive before you recoup your CAC.
The faster your CAC payback, the less capital you will need to raise.
The rule of thumb is less than 12 months is good, because that’s the usual fundraising cycle.
But, really, the faster the CAC payback, the better.
CAC payback is an important measure of your unit economics.