Customer Acquisition Cost is the single metric that separates brands that scale profitably from brands that grow themselves into financial trouble. It tells you exactly what you paid to win each new customer.
The Formula
CAC = Total Sales & Marketing Spend ÷ New Customers Acquired
Why It Matters
CAC is powerful in two comparisons. Measured against revenue per customer, it tells you whether acquisition is profitable. Measured against itself over time, it tells you whether efficiency is improving.
CAC vs LTV
The standard benchmark is a 3:1 LTV:CAC ratio[1]. Below 3:1 means you're likely acquiring customers unprofitably. Above 5:1 may indicate underinvestment in growth.
CAC Payback Period
CAC Payback = CAC ÷ Monthly Gross Profit per Customer
Shorter payback periods give more flexibility to reinvest. Target 12 months or less for SaaS.
How to Reduce CAC
- Improve Quality Score to lower CPC. Fewer dollars per click means lower CAC.
- Improve landing page conversion rates. Same budget, more customers.
- Invest in organic channels. SEO and content marketing reduce long-run blended CAC.
- Build referral loops. Referred customers are the lowest-CAC acquisition channel.
How Scanner Helps
Scanner measures the signals that drive two of the highest-impact CAC levers: landing page conversion rates and Quality Score. Improving your Site Score compresses CAC across every campaign.