The CAC Cheatsheet

CAC — Cost of Acquiring a Customer — is the amount of money that you spend on acquring

ONE
Paying
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