Customer Acquisition Cost (CAC)(Customer Acquisition Cost)

The total cost of acquiring one customer: CAC = sales & marketing spend ÷ new customers in the same period. Standard practice is to include not only ad spend but also salaries, tooling, and referral incentives tied to acquisition.

CAC Payback Period and the LTV : CAC ratio are the inseparable companion metrics for unit economics. For SaaS, payback within 12 months and an LTV : CAC of 3× or higher are common benchmarks.