Runway 200

glossaryupdated October 26, 2026

CAC: what it is and how to calculate customer acquisition cost

CAC (customer acquisition cost) is how much it costs on average to win one paying customer. It includes all spending on acquisition: ads, salaries of salespeople and marketers, email tools.

CAC = acquisition spend for a period ÷ new paying customers in that period

Example. In a month, ads cost $6,000 and a sales manager was paid $4,000; 25 new paying customers came in. CAC = $10,000 ÷ 25 = $400.

Common mistakes

  • Counting only ads. Without the sales salary, CAC in the example comes out at $240 instead of $400, and ads look almost half as expensive as they are.
  • Dividing by everyone who signed up rather than by those who paid.
  • Looking only at the average CAC. Channel A: $3,000 and 20 customers, so $150 per customer. Channel B: $5,000 and 5 customers, so $1,000. The average CAC of $320 looks fine, while the second channel is eating money.
  • Taking too short a period. If a month or two passes between the first touch and payment, March spending brings customers in April. For long sales it's more honest to count by quarter.

What to compare it with

CAC alone says nothing: $400 is expensive for a $25 subscription and cheap for a $1,000 one. It's compared with LTV: a healthy ratio is LTV at least three times CAC. People also look at the payback period: CAC ÷ monthly margin per customer. At a $100 monthly margin, the customer from the example pays back in 4 months.

In Runway 200

CAC isn't set with a slider — the game calculates it. Spending on channels and sales salaries over the last eight weeks is divided by the growth in paying customers over the same weeks. So with heavy churn CAC goes up: some new customers only replace the ones who left. CAC appears on screen in the second phase, once the dashboard is upgraded to level three.

Work out CAC, LTV and payback on your own numbers — unit economics calculator. How CAC and LTV fit into the bigger picture — in Unit economics in plain words.

More in the glossary: Burn rate · Cohort · LTV · MRR and ARR · Product-market fit · all terms