SaaS Metric
Customer Acquisition Cost (CAC)
Definition
Customer acquisition cost (CAC) is the fully loaded cost of sales and marketing required to acquire one new customer. CAC = total sales & marketing spend in a period ÷ new customers acquired in that period. It is judged against lifetime value (LTV:CAC of 3:1 is the standard target) and CAC payback period (ideally under 12 months for B2B SaaS).
Formula
CAC = total sales & marketing spend in period ÷ new customers acquired in period
Benchmark
Judge CAC relative to LTV and payback, not in isolation. LTV:CAC of 3:1+ and CAC payback under ~12 months are the common B2B SaaS targets.
Make CAC fully loaded
A defensible CAC includes all sales and marketing costs — salaries, commissions, ad spend, tools and overhead — not just media spend. Understating CAC by omitting salaries is the most common way the number gets gamed.
CAC means little on its own. It is only healthy or unhealthy relative to the value a customer returns, which is why it is always read with LTV:CAC and CAC payback period.
Frequently asked questions
How do you calculate CAC?
CAC = total sales and marketing spend in a period ÷ the number of new customers acquired in that period. Include salaries, commissions, ad spend, tools and overhead for a fully loaded figure.
What is a good CAC for SaaS?
There is no universal dollar figure; CAC is judged relative to value. Aim for an LTV:CAC ratio of about 3:1 and a CAC payback period under roughly 12 months for B2B SaaS.
Related metrics
Customer Lifetime Value (LTV)
Customer lifetime value (LTV) estimates the gross-margin revenue an average customer generates before churning. Learn the margin-adjusted LTV formula, the LTV:CAC ratio, and benchmarks.
CAC Payback Period
CAC payback period is how many months of gross margin it takes to recoup the cost of acquiring a customer. Learn the formula and healthy SaaS benchmarks.
Average Revenue Per Account (ARPA)
ARPA (average revenue per account), also ARPU, is recurring revenue divided by number of accounts. Learn the formula, why it matters for pricing and LTV, and how to grow it.
Track this automatically
Connect Stripe and RetentionLens computes CAC for you — with cohorts, trends and churn-risk scoring. Start on the free tier.
Benchmarks are general SaaS ranges and vary by segment, stage and business model. Last reviewed 2026-05-30.