Calculate Your Marketing-Only CAC
Your Marketing-Only CAC
This represents the average cost to acquire one new customer based *only* on your marketing spend and marketing-attributed customers. It's useful for evaluating marketing efficiency. Accurate customer attribution is key for this metric. Compare it with your LTV.
Understanding Marketing-Only CAC
Why Calculate Marketing-Only CAC?
Calculating CAC based solely on marketing spend helps isolate the performance of your marketing team and campaigns. It answers the question: "How much does it cost marketing to bring in a customer?"
- Evaluate specific campaign ROI.
- Compare efficiency across different marketing channels.
- Justify marketing budget allocation.
- Requires careful customer attribution.
The Challenge of Attribution
The accuracy of Marketing-Only CAC heavily depends on how you attribute new customers to marketing efforts. Common models include:
- First-Touch: Credits the first marketing interaction.
- Last-Touch: Credits the last marketing interaction before conversion.
- Multi-Touch: Distributes credit across multiple touchpoints (e.g., Linear, Time Decay, U-Shaped).
Choose a model that fits your business and use tools like Google Analytics or CRM data to track consistently.
Formula
Marketing-Only CAC Formula
Example:
If you spent $10,000 on marketing activities, and your tracking shows these efforts led to 80 new customers, your Marketing-Only CAC would be calculated as $10,000 / 80 = $125.
Frequently Asked Questions
Include all expenses directly related to marketing efforts: ad spend, salaries/fees for marketing personnel/agencies, content creation costs, marketing software subscriptions (email, SEO, analytics), event costs, etc. Exclude sales costs like sales team salaries and commissions.
Attribution can be complex. Use tracking tools like UTM parameters in URLs, conversion tracking in ad platforms (Google Ads, Facebook Ads), CRM source tracking, and analytics platforms (like Google Analytics) to understand which marketing touchpoints led to a conversion. Choose an attribution model (first-touch, last-touch, multi-touch) that makes sense for your business.
Simple Blended CAC includes *both* marketing and sales costs in the numerator and *all* new customers in the denominator, giving a high-level average. Marketing-Only CAC isolates marketing costs and uses *only* customers attributed to marketing, providing a more focused view of marketing efficiency.
Generally, yes, but context matters. A very low CAC might indicate under-investment or focus on low-value customers. It's crucial to compare Marketing-Only CAC to the Lifetime Value (LTV) of the customers acquired through those marketing efforts. High-LTV customers might justify a higher marketing CAC.
Need Help with Attribution or Reducing Costs?
Explore our guides on tracking spend accurately and implementing strategies to lower your customer acquisition costs effectively.