What is customer acquisition cost (CAC)?

A worked example

Last quarter a SaaS company spent $45,000 on ads and $15,000 on content and tools, and won 300 new paying customers. CAC = 60,000 ÷ 300 = $200.

If paid ads alone brought 180 of those customers, paid CAC = 45,000 ÷ 180 = $250, while blended CAC, which counts all new customers including organic ones, is the $200 above. Both are useful: blended CAC for the business, paid CAC for deciding where to spend the next dollar.

LTV:CAC and payback

• LTV:CAC — lifetime value divided by acquisition cost. A ratio near 3:1 is a common rule of thumb for a healthy subscription business; below 1:1 every new customer loses money.
• Payback period — months of gross margin from a customer needed to recover their CAC. Shorter payback means growth needs less cash.

Both depend on the attribution model. A channel that rarely closes but often starts journeys looks expensive under last-touch and cheap under first-touch.

CAC in TapCub

TapCub's channel ROI report combines spend with what your analytics already knows. You import spend by day, channel, source and campaign — from CSV, by hand, or through connected ad platforms — and the report shows spend, new users, conversions, CPC (spend ÷ clicks), CPA (spend ÷ conversions) and ROAS by channel, source or campaign. With "first paid order" as the conversion, CPA is your CAC for that channel.

Spend is converted to the site's base currency at each day's rate, and you can switch the credit model between last session, first touch, last non-direct and linear to see how CAC moves.

Common mistakes

• Leaving out costs. Salaries, agencies and tools are part of CAC, not only media spend.
• Counting sign-ups as customers. CAC per sign-up is a different, lower number.
• Mismatched periods. Spend this month often produces customers next month; for long sales cycles, lag the comparison.

Related guides: Acquisition Metrics and Startup Metrics by Stage.