Definition

CAC (Customer Acquisition Cost)

Fully loaded sales and marketing cost to win one new customer, over a defined period.

CAC = total S&M spend in a period / new customers acquired in that period. The two judgement calls are (1) what counts as S&M (sales engineers? customer success?) and (2) the lag between spend and acquired customer. CAC payback (months to recover CAC from gross margin on the customer) is the more useful unit-economics framing.