Unit Economics

Blended CAC versus Channel CAC

Learn why one averaged acquisition cost hides the truth, and how to see which channels actually make you money.

  • Beginner
  • 6 min total
  • 11 chapters

What decision this helps you make: Which marketing channels to scale, fix, or cut, and how much you can really afford to pay for the next customer.

What this topic is

Blended CAC averages the cost of every new customer together, including the "free" ones from word of mouth. Channel (or marginal) CAC is the real cost of acquiring a customer from a specific paid channel. The two can be worlds apart.

Why it matters

Blended CAC flatters your numbers by mixing in free customers, hiding a paid channel that may be losing money. Scale on the blend and you can pour cash into a channel that costs far more than you think.

Who should learn it

Anyone spending on marketing across more than one channel, and anyone whose "cheap" overall CAC is propped up by organic traffic or referrals they can't simply buy more of.

What you will understand

  • Tell blended CAC apart from per-channel and marginal CAC
  • See how free customers mask an expensive paid channel
  • Judge each channel on its own real cost, not the average
  • Know what the next customer actually costs before you scale

Prerequisites

Common misconception

"Our CAC is $60, so we can spend up to that." That $60 is a blend of free and paid customers. The paid channel, the only one you can actually scale, might cost $200. Scaling on the blend spends you into a loss.