09.6.1 · Skill in Growth economics
Customer acquisition cost
What it costs on average to win one new customer.
CAC adds up marketing and sales spend and divides by new customers. Compared with lifetime value it shows whether growth makes or loses money. Product-led channels often have lower CAC but take longer to build.
Resources
2- articleStart here16 startup metrics ↗Andreessen Horowitz · 2015 · 18 min
Clear definitions of the business metrics investors ask about, such as bookings, recurring revenue and lifetime value.
- articleGo deeperSaaS Metrics 2.0: a guide to measuring and improving what matters ↗David Skok · 2013 · 35 min
The standard long-form reference for MRR, churn, LTV and CAC, with the formulas and the reasoning behind them.
Tools
none yetTools for this topic are being researched.