CAC

CAC (Customer Acquisition Cost) is the total cost of acquiring one new customer, calculated as: total sales and marketing spend ÷ number of new customers acquired in the same period. It's one half of the critical unit economics pair — CAC and LTV (Lifetime Value) together determine whether a business model is sustainable.

CAC calculation nuance: include all fully loaded costs — sales team salaries, marketing team salaries, ad spend, events, content costs, and tools. Don't just use ad spend — that undercounts by 2–5x. Payback period (months to recover CAC from gross margin) is often more actionable than raw CAC.

CAC varies dramatically by channel: paid ads might have ₹5,000 CAC, sales team ₹50,000 CAC, and product-led growth ₹500 CAC for the same company.

Indian SMB B2B CAC is typically ₹5,000–₹25,000 per customer for bottom-up SaaS. Enterprise B2B CAC ranges from ₹1 lakh to ₹10 lakh depending on deal size and sales cycle length. D2C CAC has inflated dramatically since 2020 — Meta and Google CAC in India for D2C has increased 3–5x as competition increased.

A specific India nuance: many Indian SaaS customers require significant free trial and white-glove onboarding before converting. This "sales assist" cost is often invisible but real — factor it into CAC calculation or you'll consistently underestimate your true acquisition cost.