// Metrics

CAC

Customer Acquisition Cost, fully-loaded S&M spend divided by new customers acquired in the period.

In depth

CAC includes salaries, commissions, tooling, ads and content, not just paid media. Blended CAC divides by all new customers; paid CAC divides by customers attributable to paid channels only. CAC is only meaningful when paired with LTV and payback period.

Related terms

LTV

Lifetime Value, the gross-profit-weighted expected revenue from a customer over their lifetime.

CAC Payback

Months of gross profit required to recover the CAC of a new customer.

Magic Number

Net new ARR in a quarter divided by S&M spend in the prior quarter. A payback proxy.

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