Customer Acquisition Cost (CAC)
The total cost of acquiring a new customer, including all sales and marketing expenses.
Definition
Customer Acquisition Cost (CAC) measures how much you spend to win each new customer. Calculate it by dividing total sales and marketing costs by the number of new customers acquired in a period. CAC is essential for understanding unit economics and ensuring sustainable growth.
Why It Matters
CAC determines profitability. If CAC exceeds customer lifetime value (LTV), you lose money on every customer. Investors closely watch CAC and LTV:CAC ratio. Efficient customer acquisition is the difference between profitable growth and burning cash.
Examples
- $50K marketing + $50K sales costs ÷ 100 new customers = $1,000 CAC
- Healthy SaaS LTV:CAC ratio is 3:1 or higher
- Payback period: months to recover CAC from customer revenue
How Bullseye Helps
Bullseye lowers CAC by increasing lead volume from existing traffic—no additional ad spend required. Identifying website visitors means you're not paying to acquire leads that were already on your site. More leads from the same spend = lower CAC.
Related Terms
Lead Generation
The process of attracting and converting strangers into prospects who have indicated interest in your product or service.
Demand Generation
Marketing programs focused on creating awareness and interest in a company's products or services.
Conversion Rate
The percentage of visitors or leads who complete a desired action, such as signing up or purchasing.
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Related Use Cases
Lead Generation
Generate leads from your website without forms by identifying anonymous visitors.
Sales Intelligence
Real-time intelligence on website visitors for proactive sales outreach.
Account-Based Marketing (ABM)
Identify individuals from target accounts visiting your site for ABM programs.
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