CAC vs Funnel Conversion Rates
What is the difference between CAC and Funnel Conversion Rates? Side-by-side definitions, formulas, and benchmarks for two of the most-watched SaaS metrics.
Definitions
What is CAC?
CAC is customer acquisition cost, the sales and marketing investment required to acquire customers.
What is Funnel Conversion Rates?
Funnel Conversion Rates measure how prospects move from one stage of the marketing and sales funnel to the next.
CAC vs Funnel Conversion Rates at a Glance
| CAC | Funnel Conversion Rates | |
|---|---|---|
| Category | Metrics | Formulas |
| Formula | Overall CAC = S&M Spend / New Customers | — |
| Benchmarks | — | target: 20–30%; target: 10–20%; target: 5–10%; target: 1–2% |
| Calculator | CAC calculator | — |
When Each Matters
CAC and Funnel Conversion Rates answer different questions. CAC is customer acquisition cost, the sales and marketing investment required to acquire customers. Funnel Conversion Rates measure how prospects move from one stage of the marketing and sales funnel to the next. In practice, healthy SaaS operators watch both, because each one catches failure modes the other misses.