CAC Payback Period: Understanding Risk vs. Return in SaaS Metrics

This article challenges common misunderstandings of CAC Payback Period (CPP), a critical SaaS metric that measures risk rather than return. The author explains that CPP is frequently misinterpreted, particularly regarding how annual/multi-year prepaid contracts affect payback calculations, and argues that companies must analyze both risk metrics (CPP) and return metrics (LTV) for proper SaaS business evaluation.