Online marketing and distribution: the terms, channels and tools

Decide what a rising CAC tells you to fix

15 min

Applies when: you do not know your CAC, it rose for two months in a row, or a dashboard reports “cheap” leads while overall cost per new customer creeps up. Use this to decide the next fix — improve the funnel, raise price or bundle, or pause the channel — before spending more to optimise.

The two numbers to track:

Metric	Formula	Use it to decide
Blended CAC	All marketing + sales spend ÷ all new paying customers in period	True cost including organic and word-of-mouth
Paid CAC (by channel)	Spend on that channel ÷ new paying customers from that channel	Whether that channel itself pays back

Payback window: Payback months = CAC ÷ gross profit per customer per month. Gross profit = revenue − COGS, delivery, payment fees and refunds, not revenue alone. If payback exceeds cash you can lock up, the channel fails even with “good” CAC.

Add all marketing and sales spend for the last 30 days
Count all new paying customers in same period and calculate blended CAC
Count new customers per paid channel and calculate paid CAC per channel
Calculate gross profit per customer per month after fees, COGS and refunds
Write kill threshold: pause or fix channel if payback exceeds X months

0/4 done

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