CAC (Customer Acquisition Cost)
Definition
Customer acquisition cost, the total amount invested in marketing and sales divided by the number of clients acquired over the same period. A core KPI for sales management.
Detailed explanation
CAC measures how much each new client costs. Formula: (marketing costs + sales costs + tools + valued human time) / number of signed clients. Healthy CAC: under one third of the 12-month LTV (Lifetime Value). B2B SaaS example: 2,000 EUR in Meta ads + 400 EUR in tools + 20 hours of sales calls at 50 EUR = 3,400 EUR for 10 signed clients = 340 EUR CAC. If the average client pays 50 EUR per month for 18 months = 900 EUR LTV. LTV/CAC ratio = 2.6, which is the lower limit. For a freelance media buyer, presenting blended CAC across all channels to the CEO is more meaningful than ROAS per campaign.
Related terms
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