Definition
CAC tells you what growth costs. Fully loaded CAC includes salaries, commissions, tools, ads and agency fees for sales and marketing. Blended CAC includes organic customers; paid CAC isolates paid channels.
Formula
CACCAC = Sales and marketing expense in period ÷ New customers acquired in period
Example
A company spends $300,000 on sales and marketing in a quarter and adds 25 new customers. Blended CAC is $12,000.
Benchmarks
CAC on its own says little. Read it against what a customer is worth: CAC payback and LTV to CAC.
Common mistakes
- Leaving out salaries and only counting ad spend.
- Dividing by a duplicate-inflated new-customer count.
- Mixing blended and paid CAC in one trend line.
Examples use Demo Co, a fictional $3M ARR SaaS company, or a generic company where noted. Benchmarks are common reference points, not targets for every business.