Customer Acquisition Cost

The hard part is deciding what goes in the top line. A “fully loaded” CAC includes salaries, tools, agencies, ad spend and overheads for sales and marketing. A “paid” CAC includes only media spend. Both are useful, as long as you label which one you are reporting.

Channel CAC divides the cost of one channel by the customers it produced. For SEO, the cost side includes content production, people, tools, technical work and any agency fees. The customers side depends on your attribution method, which is the weakest part of the calculation, so state the method you used.

SEO has a timing quirk. Spend comes first and results arrive months later and keep arriving after spending slows. Measuring a single month’s spend against that month’s customers makes SEO look expensive early and cheap later. A rolling period, such as the trailing twelve months, gives a fairer picture.

Payback period answers how long it takes a new customer’s gross profit to repay what it cost to acquire them. It is often more useful than CAC alone, because it shows how much cash growth ties up.

Pages that bring in customers cheaply are usually the ones closest to a purchase: comparisons, alternatives, pricing and integrations. When a team has CAC by channel, it can argue for moving budget into SEO with numbers rather than opinion, and it can see when a content program has stopped paying for itself.