Financial Metrics
Customer Acquisition Cost (CAC)
The total cost of acquiring a new customer, including all marketing and sales expenses.
What is CAC?
Customer Acquisition Cost (CAC) is the metric that calculates exactly how much money it costs to convince a potential customer to buy a product or service.
Formula
(Total Sales & Marketing Costs) / (Number of New Customers Acquired)
Why it Matters
CAC is a primary driver of your unit economics. If your CAC is higher than the lifetime value (LTV) of a customer, your business model is unsustainable.
Healthy Benchmarks
For B2B SaaS, a healthy LTV:CAC ratio is typically considered to be 3:1 or higher. This means you make $3 in revenue for every $1 you spend acquiring a customer.