compute-cac-by-acquisition-channel

Compute CAC by acquisition channel

The number that matters is fully loaded: ad spend plus the people and tools that produced the customers. A channel is only cheap if you divide by the customers it actually sourced.

Procedure

1. Define the numerator: program spend (ads, events, sponsorships) plus the fully-loaded cost of the marketers, SDRs and tools that run the channel, over the period.

2. Define the denominator carefully: new customers acquired, not leads, not trials, not influenced pipeline.

3. Compute per channel and blended:

   ```
   python3 -c "from decimal import Decimal as D; print((D('40000')+D('15000'))/D('250'))"
   # 220.00 fully-loaded CAC
   ```
   

4. Report both. A blended figure mixes a cheap organic channel with an expensive paid one; quoting the blend to justify the paid channel hides the gap.

5. Exclude organic and referral from a paid-channel denominator only if the attribution is trustworthy; otherwise keep the channels separate entirely.

6. Compare CAC to gross-profit payback, not to revenue: a $220 CAC against $55 monthly gross profit is four months of payback.

7. Watch marginal CAC, not just average CAC. The next $10,000 in a saturating channel often costs twice the average; plot CAC against cumulative spend.

8. Keep spend and counts as exact values; a float per-customer average hides the cents that matter when CAC approaches gross profit.

9. Re-baseline quarterly and after any channel change; a channel that failed on old creative is worth a retry, not a retirement.

10. Report CAC with the channel, the window and the denominator named, or it will be compared next quarter to a different definition.

Pitfalls

• Dividing spend by leads or trials instead of acquired customers.
• Omitting salaries and tools, which can double the headline CAC.
• Reporting per-channel CAC without a matching attribution rule.
• Quoting blended CAC to justify a paid channel that is far dearer on its own.
• Using average CAC after marginal CAC has already doubled.
• Float spend arithmetic that drifts the cents when CAC nears gross profit.

Verification

```
python3 -c "from decimal import Decimal as D; print((D('40000')+D('15000'))/D('250'))"
# 220.00 -> $220 fully-loaded CAC for 250 new customers
```

Pass when each channel has a named numerator and denominator. Report CAC per channel and blended, with the window and the customer definition behind each.