SaaS CAC Payback Period Simulator.

## The Most Important Metric in SaaS

Customer Acquisition Cost (CAC) Payback Period tells you exactly how many months it takes for a customer to generate enough gross profit to pay back the sales and marketing money you spent to acquire them.

### FAQ

**Q: What is a 'Good' CAC Payback Period?**
A: For SMB and Mid-Market SaaS, 12 to 18 months is considered stellar. For Enterprise software with multi-year contracts, 24 to 36 months can be acceptable. If your payback period is 48 months, your company risks running out of cash before customers become profitable.

**Q: Why do we use Gross Margin instead of pure ARPA?**
A: If your software costs $10,000/yr but you spend $3,000/yr on AWS hosting and customer support (COGS), your gross profit is only $7,000. It takes longer to pay back your CAC using $7,000 than $10,000.