Customer acquisition cost is what you spend, on average, to win one customer — total sales and marketing cost divided by customers acquired in the period. Paired with lifetime value (LTV), it answers whether growth creates or destroys money.
Early CAC numbers lie easily. Count everything that produced the customers, including founder time on sales if it's material.
Pre-PMF, optimizing CAC is premature — early customers are hand-won and expensive by design. Track it to learn the channels, not to judge the business yet.
Practical answers
Only meaningful relative to LTV and payback period. Recovering CAC within 12 months is a common SaaS benchmark.
Organic referrals make blended CAC look great precisely because they cost nothing — which is why channel-level CAC is the number to manage.
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