Customer Acquisition Cost (CAC)

Calculate the total cost of winning a new customer to evaluate marketing efficiency and ensure sustainable unit economics across all channels.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC)

definition

Introduction

Why it matters

How to apply it

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Growth orchestration

The cockpit that sits above your four growth engines. Individual teams can excel at their own metrics, but without orchestration they're musicians playing different songs. This is where everything comes together and where improvements in one engine amplify gains in another.

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Growth team tools

Growth team tools

The wrong tools create friction. The right ones multiply your output without adding complexity. These are the tools I recommend for growth teams that move fast.

Compound growth

Compound growth

Small improvements multiply. A 10% gain across twelve metrics doesn't add up to 120% - it compounds to 3x growth. This is the mathematical engine behind systematic growth.

Growth strategy

Growth strategy

Four decisions that shape everything else. When growth feels harder than it should, the problem is usually here. Get these right and execution becomes much easier.

Growth rhythms

Growth rhythms

Without rhythm, effort becomes scattered and progress invisible. A consistent operating cadence keeps your team aligned and your growth system continuously improving.

Related books

Company of One

Paul Jarvis

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Company of One

Lessons for keeping work simple and profitable. Focus on retention, systems and selective growth that preserves quality.

Related chapters

2

Quarterly planning

Annual goals mean nothing without quarterly targets that break them down. Learn how to work backwards from revenue through conversion steps and set the assumptions your team will execute against. By the end of this chapter, you'll have a model that turns ambition into arithmetic and gives every team a number they own.

5

Monthly review

Most teams look at dashboards without knowing what to do with the numbers. Learn how to diagnose what actually happened, separate signal from noise, and make course-corrections while there's still time to recover. Turn data into decisions instead of just reporting.

Wiki

Pirate metrics

Track your user journey through Acquisition, Activation, Retention, Referral, and Revenue to identify which stage constrains growth most.

Product-led growth

Drive acquisition and expansion through product experience where users discover value before sales conversations and upgrade based on usage.

Growth mindset

Cultivate belief that skills and results improve through deliberate effort, treating setbacks as learning opportunities rather than fixed limitations.

Lead velocity rate

Measure the month-over-month growth in qualified leads to predict future revenue and catch pipeline problems before they impact revenue three months later.

Key Performance Indicator (KPI)

Select metrics that reveal whether you're achieving strategic goals to track progress and identify problems before they become expensive to fix.

Email sequence

Automate multi-touch email campaigns that adapt based on recipient behaviour to nurture leads consistently without manual follow-up from reps or marketers.

Sales qualified lead velocity

Track how fast your pipeline of ready-to-buy leads grows to forecast sales capacity needs and spot when lead quality or sales efficiency changes.

Sample size

Calculate how many users you need in experiments to detect meaningful differences and avoid declaring winners prematurely based on insufficient data.

OMTM (One Metric That Matters)

Focus your entire organisation on the single metric that best predicts success at your current growth stage, avoiding distraction and misalignment.

First-touch attribution

Credit the channel that introduced prospects to your brand to measure awareness efforts and understand which top-of-funnel activities start customer journeys.

Statistical significance

Determine whether experiment results reflect real differences or random chance to avoid making expensive decisions based on noise instead of signal.

Cohort analysis

Group customers by acquisition period to compare behaviour patterns and identify which acquisition channels and time periods produce the best long-term value.

Value proposition

Articulate the specific outcome customers get from your solution to communicate why they should choose you over doing nothing or using alternatives.

UTMs

Track campaign performance precisely by appending parameters to URLs that identify traffic sources, mediums, and campaigns in your analytics.

Monthly Recurring Revenue (MRR)

Track predictable monthly subscription revenue to monitor short-term growth trends and make faster decisions than waiting for annual revenue reports.

Eisenhower Matrix

Prioritise tasks systematically by sorting them into urgent-important quadrants, focusing effort on high-impact activities.

Product-market fit

Achieve the state where your product solves a genuine, urgent problem for a defined market that's willing to pay and actively pulling your solution in.

Braindump

Clear mental clutter by transferring all thoughts, tasks, and ideas onto paper or screen, creating space for focused work.

Marketing stack

Organise the tools that capture leads, nurture prospects, and measure performance to automate repetitive work and connect customer data across systems.

Sales-led growth

Win customers through direct sales conversations where reps guide prospects from discovery to close with personalised solutions and relationship building.