SaaS Marketing
CAC (Customer Acquisition Cost)
Quick definition
CAC is the total sales and marketing spend required to acquire one paying customer.
Calculate CAC as: (Sales + Marketing spend in a period) ÷ (Number of new customers acquired in that period). Include salaries, tools, ad spend, and content production.
Why CAC (Customer Acquisition Cost) matters
CAC alone is meaningless — it must be evaluated against LTV. A healthy SaaS company typically targets LTV:CAC of 3:1 or higher.
How CAC (Customer Acquisition Cost) works in practice
Lower CAC by investing in compounding channels (SEO, content, referrals, PLG), improving conversion rates, and shortening sales cycles.