Customer Acquisition Cost (CAC)(CAC)
Quick definition
The total costs you incur to acquire a new customer, including marketing and sales expenses.
Detailed explanation
CAC is a crucial metric that determines whether your business model is scalable. It calculates all costs you make to acquire customers: marketing spend (ads, content, events), sales salaries and commissions, tools and software, and overhead. CAC is calculated by dividing total sales and marketing costs by the number of new customers in that same period. A good benchmark is that your CAC should be recovered within 12 months, and that your LTV:CAC ratio should be at least 3:1. If your CAC is higher than your first-year revenue, or your LTV, you have a problem. CAC can be improved through better targeting (higher conversion rates), more efficient sales processes (shorter sales cycles), or lower acquisition costs per channel.
Synonyms
Examples
A company spends €100K on marketing and €150K on sales salaries per month, and wins 50 new customers → CAC = €250K / 50 = €5,000 per customer
After analysis, inbound leads have a CAC of €2,000 while outbound costs €8,000. They shift budget to inbound and improve outbound targeting, reducing blended CAC to €3,500.
When to use this?
Calculate CAC per acquisition channel to see where your best ROI is. Monitor CAC trends over time - rising CAC is a red flag. Always compare CAC with LTV to determine if your unit economics are healthy.
Match-day approach
Match-day helps you get a clear picture of your true CAC per channel. We implement proper attribution in your CRM and marketing automation, so you know exactly what each customer costs. Then we optimize your funnel to reduce CAC: better targeting (less wasted spend), higher conversion rates (better qualification and closing), and shorter sales cycles (faster to revenue). For many companies we reduce CAC by 30-50% through process optimization alone.
Learn more
Wil je weten hoe je customer acquisition cost (cac) effectief inzet in jouw organisatie? Neem contact op met Match-day.
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