Match acquisition spend to the pace of cash you earn from customers. Use contribution margin and cohort curves to set realistic payback targets.
CAC payback is commonly defined as ______.
time until ROAS exceeds 1.0
time to recover CAC from cumulative contribution margin cashflows
time until leads equal CAC
time until cumulative revenue equals CAC
To align with CLV economics, payback calculations should use ______.
gross margin after variable cost to serve
impressions delivered
marketing spend excluding CAC
booked revenue before discounts
Cohort-level payback curves improve planning because they ______.
average all customers into one curve
assume identical ARPU growth across channels
ignore retention differences
reflect churn and expansion over time within each acquisition month
All else equal, which change most directly shortens payback?
reducing CAC for the same quality of customers
raising long-run NDR only
delaying billing dates
adding vanity metrics to reports
When billing is moved upfront (e.g., annual prepay), the expected payback period will usually ______.
become incomparable to monthly plans
shrink because cash arrives earlier
grow because fewer invoices exist
stay unchanged by definition
To maintain a fixed CLV-to-CAC policy when CLV estimates drop, the CAC ceiling should ______.
stay fixed until payback exceeds a year
be set by last quarter’s ROAS only
increase to compensate for lower CLV
decrease proportionally to the new CLV estimate
For channel scaling decisions, it is best to compare ______.
lifetime revenue without margin
lead volume only
marginal CAC and marginal payback at the next dollar of spend
blended CAC across the entire company
Including variable cost to serve in payback math matters because it ______.
makes CAC irrelevant
prevents overestimating cash recovery
guarantees a shorter payback
eliminates the need for CLV
A payback calculation aligned to finance will typically be performed on a ______ basis.
impressions-served basis
cash basis matching when margin is actually received
forecast-only basis without actuals
accrual basis ignoring billing timing
If two channels have identical CLV but one recovers CAC sooner, the one with faster payback is usually preferred because ______.
it lowers capital at risk and improves cash efficiency
it guarantees higher lifetime revenue
it always has lower churn
it never requires discounting CLV
Starter
You understand payback at a high level.
Solid
You use contribution margin and cohorts to track cash recovery.
Expert!
You connect payback, CAC ceilings, and CLV policy in planning.
