Customer Acquisition Cost (CAC)
Agency glossary · Updated July 2026
Definition
Customer acquisition cost (CAC) is the total sales and marketing money an agency spends to win one new client over a period. Done properly it includes the fully loaded cost of business-development people, owner selling time, and unpaid pitch hours, not just ad spend.
Total sales & marketing spend in a period / new clients won in that periodWhy it matters
CAC tells you whether new business pays for itself, and paired with lifetime value it sets your LTV:CAC ratio.
Benchmark
Agencies typically invest roughly 7 to 14% of revenue in sales and marketing. Dollar CAC varies widely with deal size.
Common mistake: counting only ad spend and leaving out founder and team selling time, commissions, and unpaid pitch labour, which often understates CAC by half or more.
See it in AgencyKit
Track this the easy way
AgencyKit runs your proposals, contracts, invoicing, time tracking, and retainers in one place, so numbers like this stay live instead of buried in spreadsheets.
Start a free trial