Customer Acquisition Cost

Definition

The total sales and marketing expenditure incurred to acquire one new customer, calculated as total acquisition spend divided by the number of new customers acquired in the same period. Customer acquisition cost is a fundamental unit economics metric that, when benchmarked against customer lifetime value, determines the commercial viability and scalability of a growth model. Investors typically look for a CAC payback period of under 18 months for B2B SaaS businesses.