Full Definition
Customer Acquisition Cost (CAC) is the total cost a business incurs to acquire a single new customer. It includes all marketing expenses, sales team costs, advertising spend, and related overhead divided by the number of new customers acquired in that period.
Formula: CAC = Total Sales & Marketing Expenses ÷ Number of New Customers Acquired
CAC Benchmarks
- B2C: $5-$50 typically
- B2B SMB SaaS: $200-$1,000
- B2B Mid-Market: $1,000-$5,000
- B2B Enterprise: $5,000-$50,000+
Blended vs Channel CAC
Blended CAC averages all channels. Channel-specific CAC helps identify which acquisition channels are most efficient. Organic channels (word of mouth, SEO) typically have lower CAC than paid channels.
Real-World Example
A SaaS company spends $100K on marketing and sales in a month and acquires 200 new customers. Their CAC is $500 per customer.
Related Terms
The total revenue a business can expect from a single customer throughout their entire relationship.
The direct revenues and costs associated with a single unit of a business model (typically per customer).
The rate at which a startup spends its cash reserves, typically measured monthly.
The strategy a company uses to generate income from its product or service.
The percentage of customers or revenue lost over a specific period, a key SaaS health metric.
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