Glossary · SaaS metrics
What is customer acquisition cost (CAC)?
Customer acquisition cost (CAC) is the total sales and marketing spend required to acquire one new paying customer over a period — total acquisition costs divided by new customers acquired.
Also called: CAC, Cost per acquisition
Updated
How is CAC calculated?
CAC = (marketing spend + sales spend) ÷ new paying customers in the period
Blended CAC divides all acquisition costs by all new customers, including organic ones. Paid CAC divides only paid-channel spend by customers from paid channels. Fully loaded CAC includes salaries, tools and agencies, not just ad spend. Pick one definition and keep it.
CAC example
In Q3 you spent $6,000 on ads, $3,000 on content contractors and $1,000 on tools, and acquired 125 new paying customers. Blended CAC = $10,000 ÷ 125 = $80. Of those customers, 30 came from ads: paid CAC = $6,000 ÷ 30 = $200. Calculate yours with the CAC calculator.
Why CAC matters
CAC is the cost side of unit economics. Compared with LTV and payback period, it tells you whether a channel can scale. Blended CAC can look healthy while paid CAC is unsustainable — the organic customers subsidize the ads.
Common CAC pitfalls
- Attribution decides channel CAC. Under last-touch, ads look cheaper than under first-touch. State the model.
- Timing lag. Spend in March may produce customers in May; very short periods distort CAC.
- Counting sign-ups instead of paying customers.
- Leaving out salaries for a team whose job is acquisition.
How VisitTrack helps measure CAC
Channel CAC needs to know which channel each paying customer came from. VisitTrack attributes every payment to the visitor's first-touch referrer and campaign (and shows four other models side by side), so you can count new paying customers per channel and divide your spend on that channel by it. See revenue attribution and the ROAS calculator for paid campaigns.
Frequently asked questions
What is a good CAC?
A good CAC is one that's comfortably below what a customer is worth. A commonly cited rule of thumb is an LTV at least three times CAC, with CAC paid back in about 12 months or less.
What is the difference between blended CAC and paid CAC?
Blended CAC divides all acquisition spend by all new customers, including organic ones. Paid CAC divides paid-channel spend only by customers from paid channels, which is usually much higher.
Related terms
- LTV:CAC ratioThe LTV:CAC ratio compares the lifetime value of a customer with the cost of acquiring them — LTV divided by CAC — to show how much value each dollar of acquisition spend creates.
- CAC payback periodCAC payback period is the number of months it takes for a new customer's gross profit to cover the cost of acquiring them.
- Customer lifetime value (LTV)Customer lifetime value (LTV or CLV) is the total revenue — or, more usefully, gross profit — a business can expect from a single customer over the whole time they remain a customer.
- Revenue attributionRevenue attribution is the practice of connecting each payment to the visitor who made it and the marketing sources — referrer, campaign, landing page — that brought that visitor, so you can see how much money each channel actually produced.
- First-touch attributionFirst-touch attribution is an attribution model that gives 100% of the credit for a conversion or payment to the source of the visitor's very first visit, ignoring every visit that came after it.
Tools and guides
See which channels actually bring paying customers
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