5 Reasons Your CAC Is Wrong (And How to Fix It)
Written by Harry Prabandham
Curated by Rubric Financial
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Mistake 1: Including the Wrong Costs
- Wrong: only including ad spend or paid acquisition costs. This underestimates true CAC by ignoring the cost of the sales team that closed the deals.
- Right: include ALL sales & marketing costs: ad spend, content marketing, sales team salaries + commissions + benefits, sales tooling (CRM, sales engagement), events, brand.
- Customer success ('post-sale CS') is generally excluded from CAC; that's part of cost-to-serve, not cost-to-acquire.
- Founder time spent on sales? At early stage, allocate founder S&M time at market rate. Otherwise you're hiding the real CAC.
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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