Why most CAC numbers are wrong
The most common CAC formula taught in growth blogs is paid spend ÷ new customers. It looks right; it's wrong. A 5-person sales team and a 4-person marketing team cost an enormous amount of money to operate, and the customers they close did not appear because of media spend alone.
Investors and acquirers know this and back the salaries in. If you're benchmarking against published numbers (Bessemer, OpenView, Pavilion), use the fully-loaded version — that's what they used.
What to include in each input
Paid spend — all paid media in the measurement period, gross of agency commissions.
Sales comp — AE base + commission + SDR fully loaded. Manager salaries should be allocated by % of time on individual contributors' deals (usually 30–50%).
Marketing salaries — multiply each marketer's salary by their % of time on acquisition vs retention. Demand-gen roles are usually 80–100% acquisition; content roles vary by program.
Tooling + agency — CRM, MAP, attribution tooling, creative agencies, contractors. Exclude tools used purely for retention (CS platforms, support).
What "good" looks like
- SaaS: CAC payback under 18 months at series B; under 12 months at scale. CAC payback = CAC ÷ (ARPU × gross margin). Use the LTV:CAC calculator to compute it directly.
- D2C: CAC should equal or undercut first-order contribution margin if the brand is non-subscription. Subscription D2C can carry CAC up to 4–6 months of recurring revenue.
- B2B services: CAC under 15% of first-year contract value is healthy; 25% is the ceiling.
How to use the salary drag number
The salary drag metric (the third result) shows what % the salary + tooling layer adds to the paid-only number. A startup with one growth marketer doing $80k of ads might show 30% drag. A series C with full sales + marketing teams typically shows 100–200%. If your drag is under 50% at series B+, your sales team is either too small or you're forgetting to count people in the formula.