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Customer acquisition cost (CAC)

Customer acquisition cost (CAC)

Noun

Customer acquisition cost refers to the expense incurred by a B2B SaaS company to secure a new customer. This metric includes the costs of marketing, sales, partner program, and other resources invested in closing a deal and winning the business. Calculating CAC helps companies assess the efficiency and sustainability of their strategies for acquiring valuable B2B relationships.

The formula for CAC is measured by dividing total sales costs by the number of new customers acquired.

The CAC for a customer acquired through partners should be significantly less than those acquired through traditional marketing because of shared marketing efforts, existing trust built with highly qualified leads via the partner.

Example:

Claud's software company, in an effort to lower their customer acquisition costs, started an affiliate marketing partnership program.

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