Understanding CAC
Customer Acquisition Cost is total sales and marketing spend divided by customers acquired. Lower CAC means higher profitability.
Calculating Your CAC
Example: Spent 100,000 on sales and marketing, acquired 10 customers. CAC is 10,000 per customer.
CAC Payback Period
How long until a customer pays back their acquisition cost through revenue? Shorter payback is better.
Reducing CAC Through Efficiency
Better targeting reduces wasted spend. Qualified prospects convert faster, lowering CAC.
Channel Optimization
Measure CAC by channel: email, LinkedIn, referrals, cold calls. Double down on lowest CAC channels.
Sales Team Productivity
More productive salespeople close more deals with same effort. Training and tools improve productivity.
Lead Quality Matters
High-quality leads convert better, reducing CAC. Invest in lead qualification and scoring.
Referrals Reduce CAC
Referral-sourced customers typically have 25% lower CAC. Invest in referral programs.
Scaling CAC
As you scale, CAC may increase. That is normal. Focus on maintaining CAC growth below revenue growth.