Customer acquisition cost, or CAC, measures how much sales and marketing spend is required to acquire a new customer. It can be calculated per customer, per cohort, or as a period-level sales efficiency metric.
CAC is most useful when paired with gross margin, ACV, retention, and payback period. A low CAC is not automatically good if customers churn quickly, and a high CAC can work when contracts are large and retention is strong.
Use CAC with CAC payback period and SaaS CAC payback benchmarks. Related calculator: CAC Calculator.