Start with how payback compares to customer lifetime. If payback is longer than lifetime, the average customer leaves before covering what it cost to acquire them. Growing in that state grows the loss; fix unit economics first.

For LTV/CAC, 3:1 is a commonly cited rule of thumb, not a research finding. Below 1 you lose money on every customer. Between 1 and 3 you are profitable, but the margin left to fund overhead and growth is thin. A very high ratio is not always good news either; it can mean you are underinvesting in growth.

The two lines on the chart answer different questions. The dashed line assumes the customer never leaves and crosses zero at the payback point. The orange line accounts for churn and converges to what an average acquired customer is actually worth. If the orange line stays below zero, the average customer costs you money.

There are three levers to reach your target: lower churn, raise price (ARPA) or cut CAC. The calculator shows how far each would need to move on its own. In practice, pricing and packaging tend to act fastest, while lower churn has the most durable effect because it extends LTV directly.

Payback targets differ by segment. In its scaling report, Bessemer points to under 12 months for SMB-focused companies, under 18 for mid-market and under 24 for enterprise. Calculate by channel and segment rather than blended averages and you will see where the real problem sits.