Know what a customer really costs.
Add up every dollar you spend to win business, divide by the customers you win, and see the full picture: your CAC, how it stacks against customer value, and how many months it takes to pay back.
Your spend
Fill these in to see your LTV:CAC ratio and payback period.
Are these unit economics healthy?
What you pay vs what you get back
Cost to acquire vs lifetime value
Unit economics scorecard
CAC as efficiency changes
Same spend, but winning more customers per period drives CAC down and lifts every downstream metric.
| New customers | CAC | LTV:CAC | Payback |
|---|
CAC, explained
CAC Definition
Total customer acquisition cost / new customers acquired. Include: paid ads, sales salaries (loaded), commission, content marketing, SEO costs, tools (HubSpot, Salesforce, etc.). Excludes: customer success, support.
CAC by Channel
Paid ads usually $50-500 per customer. SEO/content amortized: $10-100. Referrals: near $0. Sales-led B2B: $500-50,000+. Track separately to optimize allocation.
CAC Payback Period
How many months of customer revenue to recoup CAC. <12 months = great. 12-24 months = ok. >24 months = capital intensive growth, requires patient capital.
Reducing CAC
Improve conversion rates (CRO). Better targeting (reduce wasted ad spend). Use organic channels (SEO, referrals). Increase deal size (same CAC, more revenue per customer).
Common questions
What's included in CAC?
All marketing AND sales costs: ads, content, SEO tools, sales team salaries + commissions, marketing tools (HubSpot, ads platforms), demo software. Exclude post-sale costs.
CAC vs CPL?
CAC = cost per paying customer. CPL = cost per lead. Multiple leads make one customer. CPL × conversion rate gives effective CAC contribution from that channel.
Should I include founder salaries doing sales?
Yes, loaded cost. Even if you're not paying yourself, opportunity cost matters when comparing scaling options.
What's a good CAC?
Depends on LTV. CAC < LTV/3 is rule of thumb. Pure CAC number meaningless without lifetime value context.
How long does CAC take to break even?
CAC payback = CAC / monthly gross margin per customer. Under 12 months = healthy SaaS metric.
Estimates for planning only. Real CAC depends on which costs you load in, attribution windows, sales-cycle lag between spend and closed customers, and how you define a new customer. Track by channel and cohort before making budget decisions.