How do you calculate CAC in revenue marketing?
Use a consistent formula, include the right costs, and align spend to the same period as new customers.
What to include (and exclude) in CAC
- Include: paid media, events, agencies, content production.
- Include: sales compensation tied to new customer acquisition.
- Include: MAP/CRM costs used for acquisition workflows.
- Include: enrichment and intent data used to acquire customers.
- Exclude: retention-only costs (support, renewals, CSM) unless acquisition-driven.
Key CAC definitions to standardize
| Item | Definition | Why it matters | Example |
|---|---|---|---|
| New customer | First-time paying customer in the period | Avoids double-counting expansions | Net-new logo |
| Acquisition costs | Costs directly tied to generating and closing new business | Makes CAC comparable over time | Paid search + SDR comp |
| Blended CAC | Total acquisition spend divided by all new customers | Good for executive trendlines | Quarterly blended view |
| Channel CAC | Channel spend divided by customers from that channel | Improves budget allocation | Events CAC vs. Paid CAC |
| Payback period | CAC divided by monthly gross margin per customer | Shows cash efficiency | Months to recover CAC |
Tip: document these definitions in a KPI glossary and enforce them in dashboards.
How to calculate CAC correctly (process)
| Step | What to do | Output | Owner | Timeframe |
|---|---|---|---|---|
| 1 | Pick a reporting period and define "new customer" | Timebox + customer definition | RevOps + Finance | 1 week |
| 2 | Collect sales and marketing acquisition costs | Cost rollup by category | Finance | 1 week |
| 3 | Count new customers acquired in the same period | New customer count | RevOps | 1 week |
| 4 | Compute CAC and segment by channel/segment | Blended and segmented CAC | RevOps | 1–2 weeks |
| 5 | Publish a KPI glossary and review monthly | Governed dashboard + MBR cadence | GTM leadership | Ongoing |
What to monitor alongside CAC
- LTV:CAC ratio (sustainability of acquisition)
- CAC payback period (cash efficiency)
- Conversion rates by stage (where CAC is won or lost)
- Pipeline velocity and win rate (efficiency levers)
Implement these definitions in your current stack (HubSpot, Salesforce, Marketo, Eloqua, Microsoft Dynamics, and hybrid environments) without changing the business rules.
Why The Pedowitz Group (TPG)
- Platform-agnostic measurement across HubSpot, Salesforce, Marketo, Eloqua, and Microsoft Dynamics
- Revenue data governance: KPI glossary, attribution alignment, and reconciliation
- Dashboards that connect spend to pipeline, bookings, and retention impact
Explore: Data & Decision Intelligence • Marketing Operations Automation
Frequently Asked Questions
CAC = (Sales + Marketing acquisition costs) divided by the number of new customers acquired in the same period.
Include sales and marketing compensation that supports new customer acquisition; exclude retention-only roles unless they directly drive new logos.
Use the same reporting window for both spend and new customers (e.g., quarterly spend divided by quarterly new customers).
Blended CAC rolls all acquisition spend into one number; channel CAC isolates spend and customers by channel to guide optimization.
Report CAC with LTV:CAC and payback, and segment by product, region, or channel where decisions are made.