💼  Organic CAC (Customer Acquisition Cost)

Organic CAC (Customer Acquisition Cost)#

Acquisition cost attributed to unpaid, organic channels.

Important

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What it is#

Organic CAC is the average cost to acquire a customer from non-paid channels — SEO and organic search, referrals and word-of-mouth, direct traffic, unpaid social, and email newsletters. It excludes paid advertising.

Formula#

\[\text{Organic CAC} = \frac{\text{Organic Marketing Spend}}{\text{Customers from Organic Channels}},\]

where organic spend is the salaries of the content/SEO team, marketing tools, hosting and PR, and the denominator is customers attributed to those non-paid sources.

Worked example#

With a content + SEO team and tools costing $30,000 and 1,000 customers from organic traffic,

\[\text{Organic CAC} = \frac{30{,}000}{1{,}000} = 30 \text{ per customer}.\]

Why it’s useful#

It captures the long-term payoff of content, brand, SEO and referrals — usually a lower CAC than paid, and the other half (with Paid CAC) of the blended picture.

Limitations and the attribution lag#

  • Attribution is tricky — organic journeys are multi-touch and hard to credit.

  • Costs lag results — content published today may bring customers months later, so a quarter’s spend and that quarter’s organic customers are mismatched in time.

  • It looks cheap, but only after a sustained time investment to build.