At a Glance
The Customer Acquisition Cost (CAC) refers to the total marketing and sales costs required to acquire a new customer. CAC is one of the most important metrics for the economic viability of a business model: in relation to the Customer Lifetime Value (CLV), it shows whether growth is profitable. For startups, SaaS companies, and SMEs, CAC optimization is a central lever for sustainable scaling.
1. Definition: What Are Customer Acquisition Costs?
Customer Acquisition Cost (CAC) is the average amount a company must invest to acquire a new paying customer. The metric includes all marketing and sales expenses—from performance marketing to content marketing to sales team salaries.
CAC is the counterpart to Customer Lifetime Value (CLV): while CLV shows how much a customer is worth, CAC shows what it costs to acquire that customer. The ratio of these two metrics determines the profitability of the entire business model.
For startups and investors, CAC is a critical metric: it shows whether a company can grow efficiently. A high CAC with low CLV means that each new customer costs the company money—an unsustainable model for long-term scaling.
2. Calculate CAC: Formula and Examples
Basic Formula
CAC = Total Marketing and Sales Costs ÷ Number of New Customers Acquired
Example: A company spends €30,000 on marketing and sales in a quarter and acquires 15 new customers → CAC = 30,000 ÷ 15 = €2,000 per new customer
What Should Be Included in the CAC Calculation?
- Marketing: advertising budget (Google Ads, LinkedIn Ads), content production, SEO tools, marketing automation software, agency costs
- Sales: salaries and commissions of the sales team, CRM software, travel expenses, trade show costs
- Overhead: proportional costs for tools, infrastructure, and management directly serving customer acquisition
CAC by Channel
Particularly insightful is calculating CAC per acquisition channel: how much does a customer cost via SEO vs. Google Ads vs. LinkedIn vs. referrals? This analysis shows where your marketing budget has the greatest leverage.
3. Understanding the CLV:CAC Ratio
The ratio of CLV to CAC is the “unit economics” metric par excellence:
- CLV:CAC below 1:1: loss-making—each customer costs more than they generate.
- CLV:CAC 1:1 to 3:1: suboptimal—profitability is questionable, little room for growth.
- CLV:CAC 3:1 to 5:1: ideal—healthy growth with good margins.
- CLV:CAC above 5:1: excellent, but possibly underinvesting in growth.
Additionally, the CAC Payback Period is relevant: how many months does it take for a customer’s acquisition costs to be amortized? For subscription models, the payback period should be under 12 months.
4. Reduce CAC: Strategies and Levers
4.1 Strengthen Organic Channels
SEO, content marketing, and a specialist glossary generate leads long-term without ongoing advertising costs. The initial investment amortizes over months and sustainably reduces CAC. Additionally, LLMO offers new opportunities for cost-effective visibility.
4.2 Conversion Optimization
Through A/B testing of landing pages, the sales funnel, and the conversion rate, you can acquire more customers from the same traffic—without increasing marketing spend.
4.3 Referral Programs
Customers acquired through referrals typically have the lowest CAC and the highest CLV. Systematic NPS management and referral programs are therefore a strong lever for reducing CAC.
4.4 Increase Sales Efficiency
Lead scoring through marketing automation, better buyer personas, and clear target audience analysis ensure that sales resources are focused on the most promising leads.
4.5 Brand as Acquisition Accelerator
Strong brand positioning and thought leadership reduce CAC long-term: customers who already know and trust your brand require less persuasion in the sales funnel.
5. Practical Context: CAC in the DACH SME Sector
For mid-sized companies in the DACH region, specific CAC dynamics apply:
- B2B consulting: CAC typically ranges from €2,000-10,000 per new customer—depending on the complexity of the service and the length of the sales cycle.
- B2B SaaS: CAC varies widely—from €500 in self-service models to €50,000 in enterprise sales.
- Referral-based: many SMEs acquire 50-70% of their customers through referrals—these have an effective CAC close to zero.
Practical example: An innovation consultancy compares its acquisition channels: SEO/content generates leads at €800 CAC, LinkedIn Ads at €3,500 CAC, referrals at €200 CAC. The strategy: double content investment, expand referral program, focus LinkedIn budget more strategically on account-based marketing.
6. Step-by-Step: Implementing CAC Tracking
- Capture costs: list all marketing and sales costs—including salaries, tools, ads, and external service providers.
- Customer attribution: record for each new customer which channel generated the initial contact (CRM field).
- Calculate CAC per channel: divide channel costs by the respective new customers. Compare SEO, ads, events, referrals.
- Calculate CLV:CAC: relate CAC to CLV per segment and channel.
- Optimize: invest more in channels with low CAC and high CLV. Reduce unprofitable channels.
- Review regularly: track CAC monthly and quarterly. Include CAC development in your KPI reviews.
Optimize Your Acquisition Costs?
We help you analyze CAC and CLV, identify the most profitable acquisition channels, and optimize your go-to-market strategy in a data-driven manner.
7. Frequently Asked Questions
What Is a Good CAC for B2B Companies?
There is no universal benchmark—CAC depends heavily on industry, order volume, and business model. What matters is the CLV:CAC ratio: as long as it is above 3:1 and the payback period is under 12 months, your acquisition costs are healthy. For B2B consulting, €2,000-10,000 per new customer is typical.
Should Salaries Be Included in the CAC Calculation?
Yes—a complete CAC calculation (fully loaded CAC) includes all costs directly serving customer acquisition: marketing budgets, sales salaries and commissions, tool costs, and proportional management time. Only then do you get a realistic picture of your actual acquisition costs.
How Can I Reduce CAC Most Quickly?
The fastest levers: conversion optimization (more customers from existing traffic), activate referral programs (lowest CAC of all channels), and implement lead scoring (sales focuses on the best leads). Long-term, a strong SEO and content strategy reduces CAC most sustainably.