What is CAC (Customer Acquisition Cost)?
Definition
The average cost of converting a prospect into a paying customer, including marketing spend, sales salaries, and tooling. Lowering CAC while maintaining quality leads is a constant SaaS challenge.
Related Terms
The total revenue a business expects from a single customer account over the full duration of the relationship. A healthy SaaS business targets an LTV-to-CAC ratio of at least 3:1.
The price an advertiser pays for each click on a paid ad. CPC varies widely by industry, keyword competitiveness, and platform. Tracking CPC alongside conversion rate reveals the true cost of acquiring each lead.
The percentage of visitors who complete a desired action, such as signing up, purchasing, or requesting a demo. Conversion rate optimization (CRO) uses testing and UX improvements to increase this number without additional traffic.