The Danger of "Blended" CAC
- Blended vs Fully Loaded: Many founders calculate CAC by simply dividing Facebook Ad Spend by new customers. This is highly deceptive. A "Fully Loaded CAC" includes the salaries of your SDRs, the commission paid to AEs, and the cost of your HubSpot/Salesforce subscriptions.
- Organic vs Paid CAC: If you get 50 customers from SEO (free) and 50 from Paid Ads, your overall CAC drops. However, to scale, you must know your "Paid CAC". If Paid CAC exceeds the lifetime value of the customer, scaling your ad budget will bankrupt the company.
- CAC Payback Period: Once you know your CAC, you must calculate how many months of subscription revenue it takes to recover it. A payback period of less than 12 months is considered excellent for SaaS startups.