Glossary · Metrics
Customer Acquisition Cost (CAC)
CAC is the fully-loaded sales and marketing cost required to acquire one paying customer.
CAC is the fully-loaded sales and marketing cost required to acquire one paying customer.
Definition
Formula
CAC = (Total sales & marketing spend in period) ÷ (New paying customers in period)
Worked example
A SaaS startup spends $50k on marketing and $150k on a 2-person sales team in Q1 and closes 100 customers. CAC = $200,000 / 100 = $2,000.
Common mistakes
- — Excluding salaries and tooling — this understates true CAC by 2–3x.
- — Comparing CAC to MRR instead of LTV — CAC is a one-time cost; MRR is monthly.
- — Averaging across channels — paid, organic, and outbound have very different CAC profiles.
Frequently asked questions
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