CAC

Customer Acquisition Cost (CAC) is calculated by dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent.

Formula: (Total Sales + Marketing Expenses) / # of New Customers Acquired.

A healthy SaaS business typically aims for a LTV:CAC ratio of 3:1 or higher, meaning the lifetime value of a customer is three times the cost to acquire them.