CAC is total spend divided by customers acquired, and the argument is always about what belongs in the numerator. Ad spend is obvious. Software, agency fees and the salary of whoever runs it are the parts people leave out, and leaving them out is how a channel looks profitable when it is not.
It is only meaningful next to lifetime value. A high CAC is fine if customers stay for years and worrying if they buy once, which is why the ratio between the two is the number worth tracking rather than either alone.
Blended CAC, across all channels, tells you whether the business works. Per-channel CAC tells you where to spend more. Teams that track only the blended figure usually cannot explain why it moved.
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Frequently asked
What should be included in CAC?
Everything spent to win the customer: advertising, the tools used to run it, agency or contractor fees, and the loaded cost of the people doing the work. Excluding salaries is the single most common way CAC gets understated.
What is a good CAC to LTV ratio?
Three to one is the figure usually quoted for software, meaning a customer is worth three times what it cost to win them. It travels badly across industries, so treat it as a starting point and compare your own ratio over time.
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