Growth has a cost. In SaaS models, platforms or subscriptions, this cost is embodied in a central indicator, the Customer Acquisition Cost (CAC), or customer acquisition cost. Too high, it makes growth unbearable and too low, it may indicate underinvestment or poor targeting. For investors, the CAC is a strategic compass because it reveals both the commercial efficiency, the profitability of the acquisition channels and the solidity of the market positioning.
What does the CAC measure?
CAC = Marketing and Commercial Expenses / Number of new acquired customers
THE expenses Include:
- paid advertising (SEA, Social, Display),
- agency fees and content production,
- Marketing and CRM tools,
- wages, bonuses and commissions of the sales teams,
- Events, fairs or prospecting operations.
The CAC is often calculated monthly or quarterly, then analyzed by channel or segment.
Why is the CAC strategic for investors?
GO-TO-Market efficiency measurement
A mastered CAC reflects a precise targeting, a well -positioned product and a well -oiled sales machine. An increasing CAC without increase in conversion or arrival is a breathtaking signal.
Calculation of customer profitability (LTV/CAC)
The CAC is one of the two elements of the LTV/CAC ratio, determining to judge the sustainability of a recurring income model.
Scalability indicator
A company capable of acquiring new customers with Constant CAC, despite growth, demonstrates an ability to scaler its model without cost inflation.
Financial planning tool
Funding towers are often modeled in CAC X Target volume of customers → Arri → expected dilution. An unstable CAC makes any expected forecast.
CAC benchmarks by sector
| Model | LTV / CAC ratio expected | CAC PAYBACK Target |
|---|---|---|
| SaaS B2B (Mid-Market) | ≥ 3 | <12 months |
| Saas Enterprise | ≥ 5 | 12–18 months |
| SaaS B2C / Subscription | ≥ 2 | <6 months |
| Marketplaces platforms | ≥ 3 | 6–12 months |
A LTV / CAC <1 means that each client destroys value.
A CAC Payback> 18 months is generally considered too risky without strong sectoral justification.
Differentiations to integrate into the analysis
- Blended Cac : overall average, all channels combined.
- Cac by segment : more precise, identifies the profitable targets.
- CAC by canal : measure the effectiveness of each acquisition lever.
Investors are now waiting for a precise decomposition CAC by persona, channel and sales cycle.
How to improve your cac
- Target more precisely
– Refine the ICP (Ideal Customer Profiles)
– prioritize segments with high conversion and high LTV - Accelerate the sales cycle
– Reduction of the number of steps
– Relances automation and nurturing - Increase the conversion of the funnel
– Optimization of landing pages and content
– continuous A/B tests on acquisition channels - Strengthen retention as soon as the acquisition
– offers better suited to real use
– more active contractual commitment or onboarding
