Because it includes customers who arrived organically, blended CAC is lower than paid CAC. It is the honest company-level number for planning, but it can hide a paid channel that is getting more expensive if organic growth is covering for it. Track both.
Formula
Blended CAC = Total marketing spend ÷ Total new customers
Model contribution lifetime value from repeat behaviour, then see your LTV:CAC ratio and payback month.
Related terms
- CAC (customer acquisition cost)CAC is the total cost of acquiring a new customer, usually marketing spend divided by the number of new customers it produced.
- MER (marketing efficiency ratio)MER is total revenue divided by total marketing spend across every channel.
Part of the growth marketing glossary by Shiva Sharma.