The CAC Cheatsheet
CAC — Cost of Acquiring a Customer — is the amount of money that you spend on acquring
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ONE
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Paying
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Customer
CAC
Helps you calculate profitability at a unit level - one customer. Foreshadows profitability of the whole business.
CAC in terms of CPA
Cost per acquisition or CPA is the cost to acquire a prospect.
Here is how CAC and CPA are related.
Lowering CPA is one of the first things you can do to lower CAC.
Non-loaded CAC
Non-loaded CAC is the CAC in which the salaries of sales and marketing people are not included while calculating the cost.
Useful when calculating profitability of businesses where sales and marketing teams don’t scale proportionally to the number of customers. Mostly, pure software businesses.
Fully-loaded CAC
Useful in businesses where S&M teams have to scale significantly with customer acquisition.
Blended CAC
Paid CAC
A heuristic to judge the efficency of your paid growth efforts. Gives more actionable and realistic picture of your business machine than Blended CAC.
CAC Payback Period
Number of months after which
Time to recover the money you spent on getting one customer. It is the point of breakeven.
CAC Doubling Period
Number of months after which
Time to earn enough money from one customer to accquire an additional customer. A heuristic for for fast you can sustainably grow.