Calculate CAC payback and explain when CLV is not enough to justify scaling.
A cohort has CAC of $360 per customer, monthly contribution of $45, expected lifetime contribution of $1,440, and a six-month comfortable cash window. CAC payback = CAC / monthly contribution; CLV:CAC compares lifetime contribution with acquisition cost. The common shortcut is to point at a strong CLV:CAC ratio and scale immediately. That ignores that CAC is paid upfront while contribution returns over time, creating a cash-flow valley the company must fund. Step 1 CAC payback = $360 / $45 = 8 months. The customer needs eight months of contribution to recover acquisition cost. Step 2 CLV:CAC = $1,440 / $360…
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