Most founders confuse CAC payback with CAC efficiency. The two are related but they answer very different questions, and conflating them is one of the most common reasons growth stalls in year two.
CAC payback tells you how long it takes a customer to pay back what it cost to acquire them. CAC efficiency (or LTV:CAC) tells you whether each customer is worth more than they cost in the long run. Both matter, but at different stages.
Stage 1: under 6 months CAC payback
You have product-market fit and unit economics that work. Spend more.
Stage 2: 6–12 months CAC payback
You have a working channel but you’re stretching it. Audit which campaigns / segments are above and below 6 months, then concentrate spend.
Stage 3: 12+ months CAC payback
The channel is broken or the product needs a price increase. Stop spending until you fix the math.