How is CAC payback calculated?

CAC's payback period refers to the time it takes for a business to recover or earn back its customer acquisition cost. To calculate your CAC payback, you need to consider three key metrics: customer acquisition cost (CAC), average revenue per account (ARPA), and gross margin percentage. Once these metrics are sorted, divide your CAC with ARPA and multiply it by your gross margin. This computation will give you the number of months it takes to recover your CAC.