Payback period is CAC divided by the gross margin a customer generates each month — nothing recovers the acquisition cost faster than a fatter monthly margin.

Acquisition cost is spent once, up front; margin trickles back month after month until the customer churns. Payback asks how many of those months it takes to break even, while LTV-to-CAC asks whether the customer ever earns more than they cost. The two answers can disagree: a customer can pay back quickly yet churn before generating much surplus.

A short payback protects cash, but only an LTV that clears CAC by a wide margin — conventionally threefold — makes the customer worth acquiring at all.