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SaaS metrics

Customer acquisition cost (CAC)

Marketing and sales spend to win a new customer.

Definition

Customer Acquisition Cost relates marketing and sales spend to the number of customers acquired over a period. Compared with LTV (the LTV/CAC ratio) and payback time (CAC payback), it tells whether growth is profitable.

Why it matters

When acquisition is expensive, retaining and growing the existing base becomes the least costly growth lever. This is the economic argument for Customer Success against an acquisition-only approach.

How Phano helps you

Phano strengthens revenue from the existing base (retention and expansion), often far cheaper to activate than acquisition.

AI-generated
CRM · Note on the account record

[Phano] €85,000 ARR, critical · Health 34/100

June 1, 2026

→ Escalate to the sponsor

  • Silent for 28 days on email
  • Renewal in 22 days, quote not opened
  • No meeting scheduled in 6 weeks
See the diagnosticRelevantNot relevant

+ custom fields: phano_phase, phano_confidence, phano_health_score…

History on this account

[Phano] €85,000 ARR, high · Health 47/100

May 25 · → Schedule a sponsor touchpoint

[Phano] €85,000 ARR, medium · Health 58/100

May 18 · → Monitor decision-maker engagement

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Frequently asked questions

What is Customer acquisition cost (CAC)?

Customer Acquisition Cost relates marketing and sales spend to the number of customers acquired over a period. Compared with LTV (the LTV/CAC ratio) and payback time (CAC payback), it tells whether growth is profitable.

Why does Customer acquisition cost (CAC) matter?

When acquisition is expensive, retaining and growing the existing base becomes the least costly growth lever. This is the economic argument for Customer Success against an acquisition-only approach.

How do you calculate CAC?

Marketing and sales spend for the period divided by the number of new customers acquired over that same period.

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