Definition
CAC (Customer Acquisition Cost) is the cost to acquire a new paying customer. CAC is most useful when paired with payback or LTV and when the definition stays consistent over time.
Formula
CAC = acquisition spend / new customers acquired
Example
If you spent $120,000 on acquisition in a month and acquired 80 new paying customers, CAC = $120,000 / 80 = $1,500.
Common mistakes
- Using leads or trials as 'customers'.
- Mixing paid-only CAC and fully-loaded CAC without labeling.
- Ignoring churn and gross margin when judging CAC.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "CAC (Customer Acquisition Cost)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., CAC Calculator) to sanity-check assumptions.
- Read the related guide (e.g., CAC: how to calculate Customer Acquisition Cost (formula + examples)) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- CAC Calculator: Calculate Customer Acquisition Cost (CAC) from total acquisition spend and new customers.
- Blended CAC Calculator: Compare paid-only CAC vs fully-loaded (blended) CAC, and estimate payback at a target margin.
- CAC Payback Period Calculator: Estimate how many months it takes to recover CAC (months to recover CAC) using gross profit.
- Fully-loaded CAC Calculator: Calculate fully-loaded CAC by including paid spend plus sales & marketing costs (salaries, tools, and other acquisition costs).
- LTV:CAC Calculator: Compute LTV:CAC ratio and CAC payback using ARPA, gross margin, churn, and CAC.
Guides
- CAC: how to calculate Customer Acquisition Cost (formula + examples): Customer acquisition cost (CAC) explained: formula, what to include, and practical CAC metrics (paid vs fully-loaded) you can trust.
- CAC vs CPA: definitions, formulas, and when to use each: CAC vs CPA explained: what each metric measures, how to calculate them, and how to translate CPA into CAC for planning.
- Blended CAC vs paid CAC: when each is the right metric: CAC depends on what you include. Learn paid-only CAC vs fully-loaded blended CAC, how to avoid mismatches, and how to connect CAC to payback.
- CAC Payback Period (Months to Recover CAC): definition, formula, benchmarks: Learn how to calculate CAC payback (months to recover CAC) using gross profit, plus benchmarks and levers to improve it.
- Fully-loaded CAC: definition, formula, and what to include: A practical guide to fully-loaded CAC: how it differs from paid CAC, what to include, and how to keep the definition consistent for planning.