Customer Acquisition Cost
Definition
Customer Acquisition Cost (CAC) is designed to tell you how much you need to spend to acquire a single new customer.
For most B2B SaaS businesses, the costs of acquiring a new customer are determined by two factors:
- The costs of generating a lead (usually determined by marketing expenses).
- The costs of converting that lead into a customer (normally a result of sales costs, or touch costs - the salaries of sales development reps or field sales people).
Formula
CAC = total cost of Sales & Marketing / Number of Deals closed.