Also called: Customer Acquisition Cost
TL;DR
Customer Acquisition Cost, the total sales and marketing spend required to acquire one new paying customer over a given period.
CAC divides total customer-acquisition cost (sales + marketing spend, fully loaded) by the number of new customers acquired in the same period. Blended CAC mixes paid and organic; paid CAC isolates only customers acquired through paid channels.
Good CAC discipline requires consistent attribution, full loading of cost (including S&M salaries, tools, content), and segmentation by channel. CAC by channel often varies 5 to 10×, a blended CAC hides whether one channel is carrying the company.
CAC = (Sales + Marketing Spend in Period) ÷ New Customers Acquired in Same Period
Use blended CAC for company benchmarks, paid CAC for channel-level decisions. Avoid mixing the two.
Q3 S&M spend $480k, new customers acquired 320 → CAC $1,500. With ACV $4,800 and gross margin 75%, gross-profit-payback = $1,500 ÷ ($4,800 × 75%) ≈ 5 months, healthy SaaS economics.
CAC appears on the Unit Economics slide alongside payback period and LTV:CAC ratio.
CAC shows up most often in these scoring rubrics and investor profiles, jump straight to who cares about it and how to pitch them.
Lifetime Value, the total margin a customer is expected to generate over their entire relationship with the company.
The number of months required for the gross profit from a customer to repay the cost of acquiring them.
The ratio of customer lifetime value to customer acquisition cost, a headline measure of unit economics health.
A repeatable source of new users or customers, such as paid search, content SEO, partnerships, outbound sales, or virality.
A SaaS sales-efficiency ratio: net new ARR divided by sales and marketing spend in the prior period.
Long-form deep dives on the slides CAC most often shows up on.
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