Customer Acquisition Cost: How to (Actually) Calculate It and Why It’s Vital for Sustainable Growth
When I was 29 years old, I was pitching to investors for funding.
I’d breezed through my pitch deck, million-dollar smile on my face despite my shaky nerves when they asked:
‘Yeeeah! I got this’, I thought to myself.
CAC stands for ‘Customer Acquisition Cost’ and I had done the math. Smugly, I dropped an impressive number.
The investor’s eye’s lit up.
“Really? Wow!… But is that your Fully Loaded CAC?”
The room went so quiet you would hear a pin drop.
My jaw hung open, and I still cringe when I think of the dumbfounded deer-in-the-headlights look on my face.
All I could think was, “What the heck does fully loaded mean?”
I made a fool of myself that day.
Today I’m going to show you how to calculate your Customer Acquisition Cost — fully loaded — in just 3 easy steps so you never look like a fool in front of anyone.
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If you want to make investors drool over a stake in your company, then you’ve got to know your numbers.
See, investors want to avoid risk at ALL costs.
They’ll pass on a promising business if the founder doesn’t know the right numbers.
Numbers don’t lie, and neither does your fully loaded CAC.
This is a quick dose of metrics-math. Check out the video here and don’t forget to subscribe to my YouTube channel while you’re there.
Dan Martell has advised more startups than his hometown has people and teaches startup founders like you how to scale. (Get access to all my latest business hacks.) He previously created, raised venture funding for and successfully exited three tech companies: Spheric, Flowtown and Clarity.fm. You should follow him on Twitter @danmartell for tweets that are actually awesome.
Originally published at https://www.danmartell.com on October 26, 2020.