CAC

Customer Acquisition Cost (CAC) is the average cost to acquire a single new customer. Basic formula: Total sales & marketing spend / Number of new customers acquired in the same period. Fully-loaded CAC includes all costs: sales team salaries, marketing spend, tools, allocated overhead. Blended CAC averages across all channels; paid CAC isolates paid acquisition only. CAC must always be evaluated relative to LTV — if CAC is higher than LTV, the business model is fundamentally broken. CAC payback period (months of gross margin to recover CAC) is another key metric: under 12 months is excellent, under 18 months is good, above 24 months raises concerns about capital efficiency and cash flow.