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Marketing

Customer Acquisition Cost

CAC

Portrait of Lukas Horvath, co-founder of Roelu Studio
Lukas HorvathCo-founder

What is Customer Acquisition Cost?

Customer acquisition cost, or CAC, is the total amount a business spends to acquire one new customer over a specific period. The calculation includes all sales and marketing costs — ad spend, salaries, software, agency fees, commissions — divided by the number of new customers closed in that period. It is one of the foundational unit economics metrics for any growing company.

Why it matters

CAC is the number that ends arguments. A growth channel that looks great by volume can fall apart the moment you load in the real cost. Most teams under-count it on purpose — they leave out salaries, tooling, or content production — and end up with a number that flatters the board and hides the truth. Honest CAC is uncomfortable and useful. Combined with customer lifetime value, it tells you whether the business actually works. A CAC payback period of more than 18 months in B2B SaaS is usually a sign the funnel or the pricing needs work, not that you need to spend more on ads.

How it works

Pick a clean time window — a quarter is standard. Add up everything spent on getting customers in that window: paid media, marketing team salaries, sales team salaries, sales commissions, content production, SEO tools, CRM, attribution software, agency invoices. Divide by the number of net new customers closed in the same window. That number is CAC. Smart teams cut it by channel — paid CAC, organic CAC, partner CAC — to see which sources are profitable. They also track it over time. A CAC that creeps up quarter over quarter is an early signal that something in the funnel is breaking.

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