What is Customer Acquisition Cost (CAC)?

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing and sales expenses.

Formula:
CAC = Total Sales & Marketing Costs / Number of New Customers

Example:
If you spend $10,000 on marketing + $5,000 on sales in a month and acquire 100 new customers:
CAC = $15,000 / 100 = $150 per customer

CAC Benchmarks:
•B2B SaaS: $200-$2,000
•B2C SaaS: $20-$200
•E-commerce: $10-$100
•Marketplace: $50-$500

LTV:CAC Ratio:
The most important derivative metric. LTV:CAC should be at least 3:1, meaning each customer generates 3x what you spent to acquire them.

How to reduce CAC:
1. Improve conversion rates (better landing pages, onboarding)
2. Focus on organic channels (SEO, content, community)
3. Build referral programs
4. Target higher-intent audiences
5. Optimize ad spend for highest-performing channels

Use our free CAC calculator to calculate yours instantly →