---
title: CAC Payback and LTV Modeling — RGM Training
url: https://realgrowthmatters.com/training/marketing-finance/cac-payback-and-ltv-modeling/
updated: 2026-06-10
source_html: https://realgrowthmatters.com/training/marketing-finance/cac-payback-and-ltv-modeling/
---

[Home](../../../index.html) › [Training](../../index.html) › [Marketing Finance](../index.html) › CAC Payback and LTV Modeling

RGM° · Training

# CAC Payback and LTV Modeling

Determines sustainable growth speed. CAC, LTV, payback.

### What you will learn

1. [Why CAC payback / LTV matter](#why)
2. [CAC calculation](#cac)
3. [LTV calculation](#ltv)
4. [Payback period](#payback)
5. [Advanced playbook](#advanced)
6. [Mistakes](#mistakes)
7. [Checklist](#checklist)

## Why CAC payback / LTV matter

These metrics determine sustainable growth speed. Strong unit economics support aggressive growth; broken unit economics limit reinvestment.

## CAC calculation

- Total acquisition spend / new customers.
- Blended vs paid.
- Fully-loaded vs working-media-only.
- Channel-level variation.
- Source-level variation.
- Time-of-acquisition cost.

## LTV calculation

- Cohort-based not average-based.
- Gross-profit LTV not revenue.
- Predicted vs observed.
- Segment variation.
- Source variation.
- Time-discounted future revenue.

## Payback period

- Months to recover CAC from gross profit.
- SaaS sweet spot 12–18 months.
- DTC 3–6 months.
- Subscription DTC up to 12.
- Capital efficiency lens.

## Advanced playbook

- Fully-loaded CAC.
- Gross-profit cohort-based LTV.
- Channel-level unit economics.
- Predicted LTV models.
- Payback period tracked monthly.
- Source-level LTV.
- Annual review with finance.
- Scenario modeling.
- Capital efficiency narrative.
- Investment gates on unit economics.

## Mistakes

- Working-media CAC only.
- Average-based LTV.
- Revenue LTV not gross profit.
- Channel-level absent.
- Predicted LTV missing.
- Payback period ignored.
- Source-level not tracked.
- Annual review skipped.
- Scenario modeling absent.
- Investment gates missing.

## Checklist

- Fully-loaded CAC
- Gross-profit cohort LTV
- Channel-level unit economics
- Predicted LTV models
- Payback period tracked
- Source-level LTV
- Annual review with finance
- Scenario modeling
- Capital efficiency narrative
- Investment gates

## Sources and further reading

- David Skok, For Entrepreneurs
- Patrick Campbell, ProfitWell
- Tomasz Tunguz unit economics
- OpenView SaaS metrics
- Bessemer State of the Cloud
- RGM Growth Foundations unit economics module
- RGM DTC Growth unit economics module
- Daniel McCarthy customer-based valuation
- Andrew Faris DTC unit economics
- SaaSwerks research
- Marketing Brew finance coverage
- CFO Connect

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Part of the [Marketing Finance](../index.html) series.