CAC (Customer Acquisition Cost)
CAC definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.
Customer acquisition cost is total sales and marketing spend in a period divided by new customers acquired in that period.
Formula
CAC = Sales & marketing spend ÷ New customers
In practice
Blended CAC hides channel differences; paid CAC is often far higher than blended.
Related terms
Related
- ARPAAverage MRR per paying customer.
- ARRAnnualized recurring revenue: MRR multiplied by twelve.
- ChurnCustomers or recurring revenue lost in a period.
- COGSThe direct cost of delivering your product to existing customers.
- Contribution marginRevenue minus all variable costs, including variable sales costs.
- Expansion MRRMRR added by existing customers through upgrades or more seats.
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