Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

SaaS + Software
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David Skok has noted that there is a problem with using this formula, as you may have several expensive people in the team that should scale to handle a larger number of customers as you grow. In this case, your CAC will be too high. David suggested makingĀ a very simple adjustment to the Sales & Marketing expenses to take only a portion of those salaries and expenses in the early days. This will provideĀ a better indication of how CAC will look in the future when you are at scale.

 

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