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Metrics
Payback Period
The number of days until a customer's cumulative purchases exceed their acquisition cost. A 30-day payback period means you recover CAC within one month. Critical for cash flow planning: a brand with a 90-day payback period and $100K/month in new customer spend needs $300K in working capital just to fund acquisition. Shorter payback periods enable faster scaling because you can reinvest recovered CAC into acquiring more customers sooner.
Why it matters
It is the cash constraint that decides how fast you can grow. Profitable unit economics with a twelve-month payback still requires twelve months of funded losses.
In practice
Measure it in realised revenue, not projected. Payback is a cash question and cash does not accept a forecast.
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