CAC
Customer Acquisition Cost
Definition:Customer Acquisition Cost is the total sales and marketing expenditure required to win a single new paying customer.
Test & Configure CAC Live
Calculate projected meetings, pipeline revenue, and ROI metrics for this benchmark.
Isolate outbound CAC from blended company CAC: Outbound CAC should be calculated specifically against outbound-sourced pipeline to verify whether cold prospecting is operating profitably compared to paid ads.
Outbound CAC = (SDR Salaries + Commissions + Software Tooling + Infrastructure + Lead Data) / (Customers Acquired from Outbound)
CAC Payback Period (Months) = Outbound CAC / (Average Monthly Gross Margin Per Customer)
Target Payback: < 12 MonthsFrequently Asked Questions about CAC
Definition Customer Acquisition Cost (CAC) is the total aggregate cost required to acquire a new paying customer. It includes everything spent on sales and marketing over a specific period, divided by the number of customers acquired in that same period.
The CAC Formula
CAC = (Total Sales & Marketing Costs) / Number of New Customers Acquired
What Belongs in the Calculation? A common mistake is calculating CAC based only on direct ad spend or software costs. A true, fully-loaded CAC must include:
- Salaries and commissions for the sales and marketing teams.
- Advertising spend (Google, LinkedIn, sponsorships).
- Software and infrastructure costs (CRM, data enrichment tools, sending infrastructure).
- Creative and agency fees.
Example: If a company spends $30,000 in Q1 on sales salaries, $10,000 on LinkedIn ads, and $5,000 on software tools, the total cost is $45,000. If they acquired 30 customers in Q1, their CAC is $1,500.
Blended CAC vs. Channel CAC
- Blended CAC divides total spend by all new customers, including those who came in through organic search or referrals (which have no direct acquisition cost). Blended CAC gives a high-level view of business efficiency.
- Channel CAC isolates the cost and customers of a specific channel (e.g., outbound cold email vs. paid search). Blended CAC can easily hide a highly unprofitable channel if organic growth is subsidizing it. You must track both.
CAC Payback Period
CAC is only meaningful when compared to the revenue a customer generates. The Payback Period measures how many months it takes to recover the CAC.
Payback Period = CAC / (Monthly Recurring Revenue × Gross Margin)
If your CAC is $1,500, and the customer pays you $200/month (with a 90% margin), you recover the cost in 8.3 months.
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