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CAC Is A Flexible, Often-Misdefined Metric
- CAC usually refers to total sales and marketing spend over a period, not cost per customer.
- Companies often tweak the definition, which creates confusion and reduces comparability.
Keep CAC Simple And Honest
- Keep CAC simple and base it on sales and marketing line items to maintain operational value and investor trust.
- Avoid doctoring CAC by moving relevant costs into other categories to make ratios look better.
CAC Without Context Misleads
- CAC alone is meaningless without context like churn, gross margin or payback.
- Focusing only on CAC risks gaming toward cheap-to-acquire, high-churn segments.