How Customer Acquisition Cost Is Calculated on a Fully Loaded Basis

Fully loaded customer acquisition cost includes all costs associated with acquiring customers: direct marketing spend, agency fees, the fully loaded cost of every salesperson (base salary, employer contributions, benefits, and equipment), the proportion of sales management headcount allocated to the relevant channel, and any other cost that would not exist if the company stopped acquiring customers. A CAC figure calculated on direct marketing spend only is a partial figure. It understates the true cost of customer acquisition and produces a payback period that will not survive investor review.

The difference between partial CAC and fully loaded CAC is commonly between thirty and eighty percent, depending on how heavily a company relies on a sales team versus paid acquisition. An investor who calculates fully loaded CAC independently and finds a material discrepancy from the figure presented will raise this in due diligence.

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Tool: Financial Model Blueprint