Calculate Your Fully Loaded CAC
Your Fully Loaded CAC
This comprehensive CAC includes allocated overhead, providing the truest picture of acquisition cost. It's crucial for accurate profitability analysis and financial reporting. Compare this robust figure against your Customer Lifetime Value (LTV).
Understanding Fully Loaded CAC
Why Calculate Fully Loaded CAC?
Fully Loaded CAC provides the most accurate picture of your true cost to acquire a customer by incorporating not just direct sales and marketing expenses, but also a share of indirect operational (overhead) costs.
- Essential for accurate profitability analysis (Unit Economics).
- Required for robust financial modeling and reporting.
- Often requested by investors during due diligence.
- More complex to calculate due to overhead allocation.
Defining and Allocating Overhead
Overhead costs are indirect expenses necessary for business operations but not directly tied to producing a specific product or service. Examples include:
- Rent and utilities for office space.
- Salaries for administrative/support staff.
- General office supplies and software.
- Depreciation of shared assets.
These costs must be allocated logically to Sales and Marketing departments (e.g., based on headcount, square footage used, or another consistent method agreed upon with your finance team/accountant).
Calculation Formula
Fully Loaded CAC Formula
Example:
Full Sales Costs (Direct + Overhead Share): $7,000
Full Marketing Costs (Direct + Overhead Share): $12,000
Total New Customers: 100
Fully Loaded CAC = ($7,000 + $12,000) / 100
= $19,000 / 100 = $190
This $190 represents the comprehensive cost, including shared overhead, to acquire each new customer.
Frequently Asked Questions
Common overhead costs include rent/mortgage for office space, utilities (electricity, internet), salaries of non-sales/marketing/product staff (e.g., HR, finance, admin), general office supplies, insurance, depreciation on shared equipment, and potentially a portion of executive salaries.
Common methods include allocating based on departmental headcount (percentage of total employees), square footage occupied by each department, or as a percentage of direct departmental spend. The key is to choose a reasonable method and apply it consistently over time. Consult with your finance team or accountant for the best approach for your business.
While startups might initially focus on simpler CAC models, more mature businesses, those seeking investment, or companies performing deep financial analysis should calculate Fully Loaded CAC. It becomes increasingly important as overhead costs become a more significant portion of overall expenses.
Fully Loaded CAC will almost always be higher than Simple Blended CAC because it includes the additional layer of allocated overhead costs in the numerator. Simple Blended CAC only includes direct sales and marketing expenses.
Get the Full Picture of Your Acquisition Costs
Understanding your Fully Loaded CAC is key to sustainable growth. Explore our guides on profitability and financial modeling.