Customer Acquisition Cost

CAC = costs / customers

Customer Acquisition Cost (CAC) is calculated by adding all costs (employee compensation, hosting, marketing) over a period of time and dividing it by number of customers acquired during that time.

Example when our period of time is a month:

1000 customers (not free trial users)
$4,500 payroll + benefits

The CAC is $4.50:

CAC = $4,500 / 1000

Your bookkeeper can help

Your situation might be simpler than ours but because we have so many projects going on at once, we need our bookkeeper to provide exact numbers on costs. They do an awesome job breaking it down on the monthly P&L.

How to lower CAC (good)

• Inbound marketing
• SaaS
• Free trials
• Touchless conversion
• Database marketing
• Automated SEO and SEM
• Network effects

How to raise CAC (bad)

• Hire a direct sales team
• Pay for outbound marketing (ads)
• Spend lots of time on customer support