CAC -- customer acquisition cost--is a frequently oversimplified KPI that's often manipulated at best as a vanity metric.
It’s clean.
It’s simple.
It makes for great slides presented by would-be digital marketers.
But here’s the uncomfortable truth: CAC is lying to you — or at least, it can be manipulated so easily that you might be lying to yourself without even realizing it.
The way most businesses calculate and present CAC is riddled with assumptions, exclusions, and potential trickery.
This is particularly egregious if your digital marketing agency is managing and reporting on your CAC for you.
Let’s dig into the myths, manipulation, and what/how you should actually be measuring and reporting your customer acquisition cost.
At its core, CAC is simple math:
CAC = Total Marketing & Sales Spend ÷ Number of New Customers Acquired
If you spend $100,000 and get 1,000 new customers, your CAC is $100.
Simple enough, right?
But here’s the problem:
--What counts as “spend”?
--What counts as a “customer”?
--And over what time frame?
The answers to those questions are where CAC gets shady.
Let’s pull back the curtain on how digital marketing and finance teams fudge the numbers — intentionally or not.
Want to make CAC look better? Just exclude certain costs.
If you’re only counting direct response ad spend and ignoring everything else that helped close the deal, you're getting a sanitized number that looks nice but excludes critical costs.
Some companies count leads, trials, or even visitors as “customers” when calculating CAC.
Or worse: they only include high-LTV customers in the math, quietly excluding the ones who churn after 30 days.
It's reminiscent of shadow SaaS numbers that look good for reporting, but ultimately serve no one.
This isn’t just fuzzy math — it’s borderline fraud when used to raise capital.
By shortening the window of analysis to a particularly “hot” month or campaign, companies can make CAC look artificially low.
It’s like bragging about your weight loss after a single day of fasting — it doesn’t reflect the full picture.
Low CAC is nice, but how long does it take to earn that money back?
If it takes 18+ months to recover your spend, you're playing a dangerous game — especially if you’re dependent on investor capital to bridge the gap.
This is the SaaS death spiral: cheap CAC, long payback, no cash left.
This problem is rarely present in high-ticket, high margin services, but in MRR scenarios with inexpensive software that requires scale to breach into profit, it's no bueno.
You might’ve “acquired” that customer, but if they’re gone in 90 days, was it really worth the spend?
CAC that doesn’t consider lifetime value (LTV) or retention is worse than useless — it’s misleading.
Let’s say your Google Ads CAC is $350 and your influencer program is $50. If you blend them, you get a nice-looking $200 average.
But that doesn’t mean either channel is working. Averaging can mask severe underperformance in your primary acquisition engine.
Blended CAC — across all channels, products, and customer types — tells you nothing about what’s actually driving your growth.
It’s like taking the average temperature of everyone in the hospital and saying “Everything looks fine.”
Behind the math lies a set of assumptions that rarely hold up in the real world:
When these assumptions go unchallenged, CAC becomes more of a feel-good fantasy than a guiding metric.
One of the biggest mistakes marketers make is treating CAC like a monolith — a single, catch-all number that somehow represents the efficiency of all campaigns across all channels.
That’s a dangerous oversimplification.
Every campaign type — whether it's SEO, PPC, paid social, outbound, or affiliate — has wildly different cost structures, timelines, and attribution challenges.
When you blend these channels together into one CAC metric, you end up with a number that means nothing and hides everything.
SEO is front-loaded with costs and delayed in returns.
If you treat SEO with the same attribution window as paid search, your CAC will appear artificially high — especially early on.
But over time, it may prove to be your most cost-effective channel.
PPC, on the other hand, gives you data and results right now — but at a price.
PPC CAC can look attractive early, but becomes harder to maintain as scale increases and competition drives up SEM bidding costs.
Without proper segmentation, this rising CAC gets washed out in your blended average.
If you’re not segmenting CAC by campaign type, here’s what happens:
Segmenting CAC helps you:
Treat CAC like you would treat customer personas: with segmentation.
Otherwise, you’re managing your growth with a single blurred number that tells you nothing — and costs you everything.
So if CAC (customer acquisition cost) isn’t the holy grail, what should you be looking at?
Start with these:
These are the questions that uncover the truth behind the marketing spend — and protect your business from false signals.
When CAC is manipulated, misunderstood, or misused, the consequences are more than cosmetic:
We’ve seen companies with CAC under $100 implode, and others with $500+ CAC thrive — because CAC alone doesn’t tell the whole story.
At Marketer.co, we don’t fall for CAC fairy tales — and neither should you.
We help brands:
Because it’s not about how many customers you acquire — it’s about how well you understand the cost and value of each one.
CAC isn’t evil.
But like any KPI, it’s only as honest as the way it’s calculated.
When misused, it can lead entire companies off a cliff.
So the next time someone brags about their CAC, ask:
“What’s included in that number?”
Odds are, the truth is more complicated than your basic spreadsheet or monthly marketing report suggests.
Want help uncovering what your real CAC looks like?
Let’s talk. Book a free strategy audit with the team at Marketer.co.
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