How long it takes for the contribution margin a customer generates to repay their acquisition cost; the working-capital companion to LTV:CAC.
CAC payback is how long it takes the margin a customer generates to repay what you spent acquiring them. Startups.com defines it as CAC divided by the gross margin dollars that customer generates, for example CAC / (Monthly Revenue per Customer x Gross Margin %) (startups.com). The SaaS CFO frames it as a measure of how long acquisition cost ties up working capital (thesaascfo.com).
Where LTV:CAC tells you if the unit economics work eventually, payback tells you how long your cash is locked up getting there. Two businesses can both run at 3:1 LTV:CAC while one recoups in 4 months and the other in 30; the first can reinvest and compound far faster. Optifai cites payback under 12 months as healthy for the SMB tier specifically, with under 18 months for mid-market and under 24 months for enterprise (optif.ai).
Worked example (Demonstrative): an A$300 CAC against A$50 monthly revenue per customer at a 60% contribution margin (A$30 monthly contribution margin) pays back in A$300 / A$30 = 10 months, inside Optifai's under-12-month SMB benchmark. Startups.com's own example, A$10,000 CAC / (A$1,000 ARPC x 80%), gives 12.5 months.
Blufire computes payback on monthly contribution margin per customer rather than gross margin, so the period reflects the cash the customer truly throws off after COGS, fulfilment, fees, and returns, aligning it with the profit-not-revenue thesis that runs through every term on this page.