Customer acquisition cost
Updated 2026-11-02
Definition
Customer acquisition cost, or CAC, is the total you spend on sales and marketing to win one new paying buyer. The formula is sales and marketing cost for a period, divided by new buyers won in that period.
A full CAC includes ad spend, tools, content costs, agency fees and the salaries of your marketing and sales team. A narrower "paid CAC" uses only ad spend and buyers from ads. Be clear about which one you're quoting.
Example
This example uses made-up numbers. In one quarter you spend:
- $30,000 on ads
- $12,000 on tools and contractors
- $48,000 on marketing and sales salaries
That's $90,000. You win 150 new buyers, so your CAC is $90,000 / 150 = $600.
Each buyer pays $100 a month. At an 80% gross margin, that's $80 a month in gross profit. So it takes $600 / $80 = 7.5 months to earn back your CAC.
Paid CAC tells a different story. If 50 of those buyers came from the $30,000 in ads, your paid CAC is $600 as well. But if attribution credits them differently under another model, your paid CAC moves too.
Common mistakes
- Leaving out salaries
- Counting signups in place of paying buyers
- Ignoring the delay between spending and winning a sale
- Comparing channels using a single last-touch view
How Headstream handles it
Headstream doesn't calculate CAC. It doesn't import ad spend or hold your cost data. What it can give you is the other half: how many paying people and how much revenue each channel and campaign brought in, under your choice of attribution model. Connecting Stripe is in beta.
Divide your own spending by that revenue or those buyers in a spreadsheet. The API or the export makes it easy to pull those numbers. See revenue attribution.