CAC (customer acquisition cost)
Quick answer
The average cost of winning one new customer: sales and marketing spend divided by new customers.
Key takeaways
- Shows whether growth is sustainable or expensively bought
- Compared with CLV, it tells you if the commercial model is profitable
- Compared per channel, it shows where to add budget
CAC is measured over a period (month, quarter, year): total sales and marketing cost - salaries, commissions, campaigns, travel, licences - divided by new customers won in the same period.
Why it matters to a CEO
- Shows whether growth is sustainable or expensively bought
- Compared with CLV, it tells you if the commercial model is profitable
- Compared per channel, it shows where to add budget
What distorts it
- Sales costs left out of the calculation (travel, samples, discounts)
- Counting customers at signature rather than at first paid invoice
- Mismatched periods: this quarter's cost against last cycle's customers
Real-world example
A team spending €40,000 per quarter that wins 25 new customers has a CAC of €1,600. If average first-year gross margin per customer is €1,200, acquisition only pays back in year two.
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Frequently asked
What is a good CAC?+
There is no universal figure. The practical B2B rule is CLV of at least 3x CAC, with payback under 12-18 months.
How does a CRM help?+
It gives you the correct denominator: new customers by source, rep and period, alongside the activity cost behind them.
Where CRMconnect fits
Related terms
CLV (customer lifetime value)
Total margin a customer generates across the whole relationship, not just the first order.
SalesWin rate
The share of closed opportunities that were won - the main indicator of sales process and qualification quality.
SalesSales cycle
The average time from first qualified interaction to a signed order - the metric that determines how fast commercial effort turns into cash.