Formula
CAC = (sales spend + marketing spend) / new customers acquired
CAC
Also known as Customer acquisition cost
CAC is the average cost of acquiring one new customer, including all sales and marketing spend for the period.
Worked example
€40,000 of sales and marketing producing 50 new customers is a CAC of €800.
The denominator has to be new customers only. Including renewals or expansions flatters the number, sometimes dramatically.
CAC on its own says little. It is meaningful against lifetime value, which says whether a customer is worth acquiring, and against payback period, which says whether you can afford to wait.
Keep this number live
Plainhub computes cac from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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