CAC FAQ

Metrics beginner FOUNDERCMOCFO

Quick answers to the most common questions about CAC. For the full definition, formula, and benchmarks, see the CAC glossary page.

How do you calculate CAC?

Overall CAC = S&M Spend / New Customers

Keep exploring CAC

CAC is customer acquisition cost, the sales and marketing investment required to acquire customers. Read the full CAC definition for formulas, benchmarks, and common mistakes.

Related Concepts

Built from

  • Total Marketing Spend — Total Marketing Spend is the total amount a company invests in marketing over a period; it…

Feeds into

  • CAC Payback Period — CAC Payback Period measures how long it takes to recover customer acquisition cost from cu…
  • LTV to CAC Ratio — LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to eva…

Compare

  • CAC vs LTV — LTV is customer lifetime value, the estimated revenue value of a customer over their lifes…

Related terms

  • ARPA — ARPA is average revenue per account, the average recurring revenue generated per customer…
  • Customer Churn — Customer Churn measures the percentage of customer accounts lost over a given period.
  • ACV — ACV is annual contract value, the annualized revenue value of a customer contract.
  • Account Retention — Account Retention measures the share of customer accounts that remain active over a period…
  • Outbound Sales — Outbound Sales is a sales motion where the company proactively prospects and reaches out t…