What it actually costs to win one new customer. The number that determines whether your growth is profitable or just expensive.
Customer acquisition cost (CAC) is the total amount you spend on sales and marketing to acquire one new customer. It includes everything — ad spend, sales salaries, commissions, marketing tools, content production, event costs, and any other expense directly related to bringing in new business.
CAC is usually calculated over a specific period (monthly or quarterly) to account for the lag between spending on marketing and actually closing the deal.
Growth is only valuable if it's profitable growth. If you spend $5,000 to acquire a customer who generates $3,000 in lifetime revenue, you're scaling your way to bankruptcy. CAC tells you whether your growth engine is an investment or a money pit.
The most useful way to think about CAC is in relation to customer lifetime value (LTV). A common benchmark is LTV:CAC of 3:1 or better — meaning each customer generates at least three times what you spent to acquire them. Below 1:1, you're literally paying more for customers than they're worth.
CAC also varies wildly by channel. Your organic/referral CAC might be $200 while paid acquisition costs $2,000 per customer. Knowing the per-channel breakdown lets you allocate budget to what actually works.
Example: A B2B SaaS company spends $120K/month on sales (2 reps at $60K loaded cost) and $80K/month on marketing (ads, content, tools). They close 40 new customers per month. CAC = $200K / 40 = $5,000 per customer. If average annual contract value is $18K and customers stay for 2.5 years, LTV is $45K. LTV:CAC is 9:1 — very healthy.
CAC = Total Sales & Marketing Costs / Number of New Customers Acquired
Be honest about what goes into the numerator. If your CEO spends half their time on sales, half their compensation is a sales cost. If your engineering team builds marketing landing pages, that time counts too. The more accurate your inputs, the more useful the number.
CentSight calculates CAC by pulling sales and marketing expenses from your accounting data and matching them against new customer counts. It breaks down CAC by channel and tracks it over time, so you can see whether acquisition is getting cheaper or more expensive. Ask “What's our CAC this quarter versus last quarter?” and get a clear answer with the expense breakdown behind it. CentSight also shows your LTV:CAC ratio alongside churn rate and unit economics for a complete picture of growth efficiency.
CentSight tracks CAC by channel and over time, so you can double down on what works and cut what doesn't.
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