What is customer acquisition cost?
Customer acquisition cost, or CAC, is the sales and marketing cost required to acquire a new customer over a defined period.
Customer acquisition cost is sales and marketing spend divided by new customers acquired. It is most useful when segmented by source, campaign, payback period, and customer quality.
- Define customer acquisition cost
- Calculate basic CAC
- Understand blended and paid CAC
- Connect CAC to revenue attribution
Customer acquisition cost, or CAC, is the cost required to acquire a new customer.
The simple formula is:
CAC = sales and marketing spend / new customers acquired
If a SaaS company spends EUR 10,000 on acquisition in a month and gets 100 new customers, the simple CAC is EUR 100.
What to include in CAC
CAC can include:
- Paid ads.
- Sponsorships.
- Affiliate payouts.
- Content production.
- Marketing tools.
- Sales salaries.
- Marketing salaries.
- Agency costs.
- Events and webinars.
The exact formula depends on the decision you are making. A board-level blended CAC calculation may include more costs than a campaign-level paid CAC calculation.
Blended CAC vs paid CAC
Blended CAC uses total acquisition spend and all new customers. It is useful for understanding the whole growth engine.
Paid CAC focuses on paid spend and customers attributed to paid channels. It is useful for campaign decisions.
Both can be valid. The problem is mixing them without labeling the report.
CAC needs payback context
A low CAC is not automatically good. If customers churn quickly or pay very little, the channel may still be weak.
CAC should be read with:
- Monthly recurring revenue.
- Gross margin.
- Payback period.
- Refund rate.
- Churn rate.
- Expansion revenue.
- Source and campaign.
The goal is not just cheap customers. The goal is profitable customers who stay.
CAC and revenue attribution
Attribution connects acquisition cost to customer outcomes.
Instead of only asking how much a campaign spent, you can ask:
- How many paid customers came from it?
- How much new MRR did it create?
- How quickly did CAC pay back?
- How much revenue refunded?
- How many customers churned?
This is why campaign reports need payment events, not only clicks and signups.
Next steps
Read UTM revenue attribution to connect campaign tags to revenue. Use signup-to-paid funnel tracking to keep acquisition cost tied to paid conversion.
FAQ
How do you calculate CAC?
A simple CAC formula is sales and marketing spend divided by new customers acquired in the same period.
What is blended CAC?
Blended CAC uses total acquisition spend and all new customers, including organic and unpaid channels.
What is paid CAC?
Paid CAC isolates paid acquisition spend and the customers attributed to those paid channels.
Why connect CAC to attribution?
Attribution helps compare CAC by source and campaign, then connect that cost to revenue, refunds, renewals, and churn.
Connect payments to the dashboard
Install the tracker, pass attribution into checkout, and report revenue by source, campaign, landing page, and path.
Related guides
Signup-to-paid funnel tracking
Track how visitors move from landing page to signup, trial, checkout, payment, renewal, refund, and churn.
What is MRR?
Monthly recurring revenue, or MRR, is the normalized recurring subscription revenue a SaaS business expects in a month.
What is churn?
Churn measures lost customers or recurring revenue when subscriptions cancel, fail to renew, downgrade, or stop paying.
What is LTV:CAC?
LTV:CAC compares customer lifetime value with customer acquisition cost to estimate whether a SaaS acquisition channel creates enough value to justify its cost.