CAC by Channel

In a marketing department, Customer Acquisition Cost (CAC) is crucial to understand, as it helps to determine how you allocate budget towards organic and inorganic lead generation channels. The primary way CMOs and other marketing leaders back into these decisions is by comparing CAC to Customer Lifetime Value (LTV). This comparison poses the question “How much would I spend to acquire a new customer given that customer’s ultimate value to my business?” 

Using CAC benchmarks for each lead generation channel, you can determine a comfortable CAC-to-LTV ratio. It is generally healthy to shoot for 1:4, meaning you would pay $1 to make $4 in gross profit. This leaves enough room to factor in overhead costs, one-time costs, and a healthy margin of error before you’re in the territory of spending almost as much to acquire a customer as you’ll make from them. 

CAC by Marketing Channel, Organic and Inorganic

The table below lists CACs by marketing channel, separating out organic and inorganic channels. These CACs represent a 3 year average, which typically includes a 4-6 month learning period where the CAC is much higher. The benchmarks below were achieved in high-performing campaigns carried out by experienced agencies

CAC by Channel
Marketing Channel B2B CAC B2C CAC
ORGANIC MARKETING CHANNELS
Thought Leadership SEO  $647 $298
E-mail Marketing $510 $287
Social Media Marketing $658 $212
Content Marketing $1,254 $890
Basic SEO $1,786 $1,201
Podcasts $1,472 $363
Informal Networking $710 $472
Webinars $603 $251
Public Speaking $518 $474
Industry Trade Shows $1,390 $535
Video Marketing $817 $301
Average for All Organic Channels $942 $480
INORGANIC MARKETING CHANNELS
PPC / SEM $802 $290
PR $1,720 $381
Account Based Marketing (ABM) $4,664 N/A
Direct Mail $864 $347
Outdoor Advertising $1,690 $301
SDRs $1,981 N/A
LinkedIn Ads $983 N/A
Facebook Ads N/A $230
Radio Ads $2,430 $375
TV Ads $2,028 $306
Average for All Inorganic Channels $1907 $319
A note on our data: This report utilizes a dataset drawn from our agency’s clients between 2016 and 2021, representing ~120 firms. Our dataset contains a large and diverse range of B2B companies and is statistically significant for those businesses. Our dataset’s average LTV for B2B companies is $38,512. B2C representation is smaller and skewed towards more expensive products and services in the financial, real estate, and luxury goods industry. Our dataset’s average LTV for B2C companies is $11,040. Please bear this difference in mind if relying on this data for a B2C company. 

For convenience, we have also placed the information from the table into two charts, one for organic and one for inorganic marketing channels.

Further reading

If you’re interested in diving deeper into CAC benchmarks, we’ve also published reports on:

Optimize CAC With An Experienced Marketing Partner 

We hope you’ve found this report useful as you optimize your marketing decisions. Our agency has extensive experience lowering CAC through our thought leadership SEO service. To discuss a potential partnership, contact us here.

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