CAC Payback Period vs Repurchase Rate: Which Should You Optimise First?

Article by: Jake Cronin, Paid-Ads Specialist

It’s a question that pops up time and time again when I speak with founders and growth leads:

Should we focus more on CAC Payback Period or Repurchase Rate?

And as always, the answer starts with it depends – on your category, your stage, and your goals.

But for most e-commerce brands, CAC Payback should take the front seat.

Context: Would You Lend a Friend £50 to Make £30 Back?

Imagine this.

A friend asks to borrow £50. They promise to pay you back… £30 in a month. And the rest? They’re not sure. Maybe in another two months. Maybe never.

Would you keep lending them money?

That’s exactly what a 90-day CAC payback looks like.

Now flip it.

That same friend offers to give you back £55 within 30 days. Suddenly, you’re all ears. You might even offer more.

That’s what brands with a 30-day CAC payback unlock. The ability to confidently reinvest, scale faster, and stay in control of their growth.

It’s not just a metric. It’s how you build a sustainable business without relying on hope, angels, or your credit card limit.

Let’s explain further..

1. Cash Flow Will Break You Faster Than Retention Ever Could

If it takes you 90+ days to recoup the cost of acquiring a customer, it means you’re cash negative for over three months. Now layer on a 60-day inventory sell-through rate, and the maths get ugly fast.

Imagine you’re spending £50 to acquire a customer and only seeing £35 back in the first 30 days. Even if they do buy again, your cash position is already strained. You’re left plugging holes in a leaky bucket with no float.

It’s not about being profitable on day one. It’s about staying solvent long enough to scale.

The brands that burn cash the fastest? They’re the ones betting on repurchase rates while ignoring the runway they actually have.

No cash flow – no paid spend – no growth.

2. You Can Control CAC Payback More Than Retention

Retention is driven by the product. And while great marketing might set the stage, if the product underdelivers, no clever email flow will save you.

But CAC payback? That’s a different story.

With acquisition, you have far more levers to pull – creative, offers, landing page experience, bundle logic, AOV strategy. And they can all shift payback significantly.

For example, we worked with a skincare brand that had a solid retention rate (over 40% repeat within 60 days), but they were still bleeding cash. By tweaking their offer to boost AOV by 20%, and restructuring their landing page to shorten the path to purchase, we brought CAC payback down from 90 days to under 45.

That bought them breathing room – and let them reinvest with confidence.

Both Metrics Matter – But Not Equally

Let’s be clear – repurchase rate is critical for LTV, profitability, and building a sustainable brand.

But in the short-to-mid term, especially if you’re using paid ads to grow, CAC Payback Period is the metric that keeps the engine running.

You can’t retain customers you never acquire. And you can’t acquire them if you’re out of cash.

So, before obsessing over lifecycle marketing or pushing retention nudges, ask yourself:

How quickly are we getting our money back?

Because if you can’t answer that with confidence, the rest won’t matter for long.

Jake Cronin

Paid Acquisition 🚀

Christian Horne

Paid Acquisition 🚀

B2B & B2C Paid Acquisition

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Through Paid Ads.

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