CAC
Definition
Customer Acquisition Cost -- the total cost of acquiring a new customer, including all sales and marketing expenses divided by the number of new customers acquired.
CAC is calculated by summing all sales and marketing costs (salaries, tools, advertising, events) over a period and dividing by the number of new customers acquired in that period. The CAC payback period -- how long it takes to recoup acquisition costs -- is a critical efficiency metric. A healthy SaaS business typically has an LTV-to-CAC ratio of 3:1 or higher, meaning the lifetime value of a customer is at least three times the cost to acquire them.
Related Tools
Related Terms
Categories
FAQ
What does CAC mean?
CAC is calculated by summing all sales and marketing costs (salaries, tools, advertising, events) over a period and dividing by the number of new customers acquired in that period. The CAC payback period -- how long it takes to recoup acquisition costs -- is a critical efficiency metric. A healthy SaaS business typically has an LTV-to-CAC ratio of 3:1 or higher, meaning the lifetime value of a customer is at least three times the cost to acquire them.
What are the best CAC tools?
Top tools related to CAC: Tinybird, Hightouch, Mixpanel, Amplitude, ChartMogul.