Customer acquisition cost
What it costs, all in, to win one new customer.
01 What it is
Why anyone looks at this number
What it costs, all in, to win one new customer.
It sets the price of growth. Paired with lifetime value it tells you whether growth is creating value or buying it at a loss.
02 The formula
How it is worked out
Customer acquisition cost = (sales_cost + marketing_cost) ÷ new_customers_won grain : quarter × segment × channel unit : currency per customer source : General ledger cost centres joined to CRM outcomes
Decide whether to include sales salaries, and whether to count only fully loaded cost. Both are defensible; a CAC that quietly excludes headcount is not comparable to anyone else's.
03 Worked example
The same number, with real inputs
| Sales and marketing cost, quarter | €1.20m |
| New customers won | 40 |
| Calculation | 1.20m ÷ 40 |
| Result | €30,000 |
Against an average first-year contract of €45,000, payback is under a year — workable. If the cycle lengthens by a quarter, that comfort disappears.
04 What moves it
Four things that actually change this number
Channel mix
Paid, partner and outbound have very different unit economics.
Win rate
Every lost deal's cost lands on the customers you did win.
Cycle length
Longer cycles mean more selling cost per win.
Brand
Inbound demand is the cheapest acquisition there is, and it is built years earlier.
05 Where the number lives
The system, the record and the fields
| System of record | Key record | Fields you need |
|---|---|---|
| General ledger cost centres joined to CRM outcomes | Cost centre and Opportunity / Customer | campaign_spend, sales_salaries, commissions, tooling, new_customer_flag |
Decide whether to include sales salaries, and whether to count only fully loaded cost. Both are defensible; a CAC that quietly excludes headcount is not comparable to anyone else's.
06 How it goes wrong
Three ways this metric misleads people
Excluding people cost
Counting only campaign spend produces a flattering number that means nothing.
Fix: Use fully loaded cost, and say so on the report.Blending new and existing
Cost of expanding an existing account is far lower and drags the average down.
Fix: Report new-customer CAC separately from expansion cost.Same-period matching
This quarter's spend won customers that will close next quarter.
Fix: Lag the spend by the sales cycle before dividing.08 Questions
Frequently asked
Should CAC include customer success costs?
No — those belong to retention and to lifetime value. Keep acquisition and retention costs apart or you cannot tell which one is the problem.
What is CAC payback?
How many months of gross profit from a new customer it takes to recover the acquisition cost. Under 12 months is generally healthy for a subscription business.
One definition, everywhere it is used
SCIKIQ stores this metric once and serves it to every dashboard, board pack and agent that asks.