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By Lenny Rachitsky · lennysnewsletter.com · @lennysan on X · YouTube · LinkedIn
Lenny Rachitsky polls sixteen growth experts on what counts as a good customer payback period across B2C, SMB and enterprise businesses. The post explains how to calculate payback on a gross-profit basis, why it matters more than LTV/CAC for early-stage companies, when longer paybacks are justified, and how to shorten them.
Subscriber post — summary only01Key takeaways
- Benchmarks vary by customer type: B2C aims under 1 to 12 months, SMB 6 to 18 months, enterprise 12 to 24 months.
- Calculate payback on gross profit rather than revenue, since revenue alone overstates how fast acquisition costs are recovered.
- Early-stage companies lack the data to trust LTV, so payback is a more reliable guide to investment decisions.
- Longer paybacks can make sense when lifetime value is predictable, the business is mature, or growth is the priority.
- Shorten payback by encouraging annual plans, using PLG tactics and expanding revenue per customer, and measure paid channels separately from blended figures.
“Revenue doesn't pay our salaries—gross profit does.”Brian Rothenberg · Lenny’s Newsletter
“Including brand search in your paid campaigns bucket will lower your payback period, and I'd consider that cheating.”Elena Verna · Lenny’s Newsletter
02Frameworks mentioned
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.