CAC For Startups. How To Set Benchmarks?

CAC for startups is a post for:

• People who are looking to start a business.
• People who have a business but have never spent money to acquire a customer and now are ready to.
• People who just want to know how to set these benchmarks up.

There is no perfect way to calculate CAC for startups, or for any company as a matter of fact, when you haven’t been in the market. It’s more of a test, learn and refine an approach that applies over here.

But here are some methods that might help when you are just starting –

8% OTLR

Many businesses have adopted this logic – 8% of the lifetime revenue. The exact percentage vary from business to business but I have seen in past this is the most common average.

So essentially if your average order value per customer is $50, and average customer purchases 5 times in their lifetime. Then your CAC = $50*5*(8)/100 = $20