Growth Metrics

Customer Acquisition Cost (CAC)

The total sales and marketing spend required to acquire one new paying customer.

CAC is calculated by dividing all sales and marketing expenses in a period by the number of new customers acquired in that same period. The all-in version includes salaries, tools, ad spend, events, and agency fees. CAC is only meaningful when paired with LTV — a high CAC is fine if customers stay long and spend more. The ratio between LTV and CAC (LTV:CAC) is one of the most widely used SaaS health metrics, with 3:1 considered the minimum healthy threshold. One frequent mistake is using blended CAC that mixes paid and organic channels; separating them reveals which acquisition motion is actually efficient and scalable.