In the startup world, there is a metrics that can charm (or scare) any investor: the CAC. Or, in other words, the Customer Acquisition Cost.
Paying too much to get a customer is one of the fastest ways to burn your budget. But beware: trying to lower it at all costs can also slow down growth.
So what is the balance?
In this article we tell you:
- How to calculate your real CCS (without self-deception)
- When to worry (and when not to worry)
- Concrete strategies to reduce it without losing traction
What the CCS is (and why you should look at it now)
The CAC is the total cost you invest in acquiring a new customer. It is calculated as follows:
CAC = Total marketing and sales expenditure / Number of new customers acquired
It includes everything: salaries of the marketing and sales team, tools, agencies, campaigns, fairs...
A healthy CAC depends on your business model, average ticket and LTV (customer lifetime value). But the important thing is that it is maintained below the value that customer generates.
Signs that your CCS is soaring
1. You invest more in customer acquisition, but the number of customers hardly rises.
You're putting more budget into marketing - campaigns, content, tools, even equipment - but the number of closed customers doesn't scale at the same rate.
This can mean that the cost per customer is rising without a commensurate return. The result? CAC soars and ROI plunges.
Real example: a SaaS startup invests 40% more in paid media at Q2but only closes 3 more customers than in the previous quarter. Something does not add up.
2. You have a lot of leads... but few convert.
Apparently everything is going well: the CRM is full, there are forms arriving every week... but no one is moving forward in the funnel. If you are attracting volume but no conversion, you may be attracting the wrong audience, you have a poorly communicated value proposition or your funnel is broken.
The CAC here is inflated because you are paying (in money or time) to attract leads that will never buy from you.
3. You are present in many channels, but you don't know which ones are working.
SEO, paid, PR, email, events... all active! But when you ask what is the top converting channelno one is clear about it. If you don't know which channel brings you the best customers, you can't optimise your budget or make informed decisions.
Without this visibility, you continue to invest in a dispersed manner and it is easy for the CAC to rise unchecked.
4. The sales team complains about the quality of the leads.
If you hear phrases like "these leads are not ready", "they are not our customer profile" or "they don't have the budget", you are probably capturing the wrong traffic. And if the leads don't close, the CAC is multiplied because you are spending on attracting, but not recovering with conversion.
This is often a clear symptom of misalignment between marketing and sales, one of the most costly mistakes a growing startup can make.
Actions to reduce CCS without slowing growth
1. Align marketing and sales (for real)
One of the most common - and expensive - mistakes is for marketing and sales to operate as separate teams. To avoid this, both should define together what a "qualified lead" really means, share constant feedback on the quality of incoming leads and adjust messages based on what is working (or not) at each stage of the funnel. When these two worlds understand each other, the CAC starts to go down almost by itself.
2. Measure and optimise every stage of the funnel
It's not enough to look at metrics at the end of the process. You need to review conversions by channel, identify where in the funnel you are losing leads and understand why. Sometimes small adjustments make a difference: a better explained landing page, a simpler form or a clearer follow-up email. And yes, automating certain parts of the process can help you to scale without increasing the cost.
3. Improve your copy and value proposition
When the message doesn't connect, the cost per lead goes up. It's as simple as that. Often it is not the channel that fails, but how you tell what you do. If you are not clear, if you do not appeal to the customer's real pain or if you do not highlight your differential, you are probably missing opportunities. Before scaling a campaign, test different copies and creatives until you find the ones that really convert.
4. Segment better (and spend less)
You don't need to reach everyone. In fact, the more specific you are, the better. Instead of targeting huge audiences, focus on those who can actually afford what you offer and who already have the problem you solve. Smart segmentation not only reduces CAC, it also improves conversion rate and lead satisfaction.
5. Retargeting done right
Not everyone converts the first time. And that's fine. But if you disappear after the first click, you're leaving money on the table. A good retargeting campaign - with relevant content tailored to the lead's moment - can close a lot of sales at a much more competitive CAC than continuing to attract cold traffic.
6. Take care of onboarding
It's not all over when you close a sale. If you lose the customer in the first few days, the effective CAC skyrockets because you have already invested in attracting and converting them, but you are not able to monetise them. Good onboarding makes the difference: create a clear, seamless experience that reinforces the value of what you are selling from the very first moment.
Real case (anonymous, but real)
A B2B startup with a skyrocketing CAC came to us. They were paying over €1,000 per customer, with long cycle times and little clarity on the funnel.
In 3 months:
- Reduced active channels from 6 to 3
- Rewriting the value proposition with a problem-solution approach
- We activate automations in sales
The CAC down by 42% without losing catchment volume.
Reducing CCS is not a matter of spending less. It is about spending better.
And if your startup is growing but you feel that the CCS is getting out of control, you may need help to focus.
At Lebowski we work as Fractional CMO with startups that want to grow with their heads held high. If you want to see if we can help you, agenda a discovery call with us.