What It Is
Customer Acquisition Cost (CAC) is the total cost of turning a prospect into a paying customer. This includes marketing spend, sales team time, tools, and yes, partnership costs. The lower your CAC, the more efficiently you're growing. A strong partner network can help lower CAC by tapping into warm introductions and shared trust. It's one of the key metrics for measuring the effectiveness of ecosystem-led growth.
When to Use CAC in Partner Context
Track CAC across different channels to understand which acquisition paths deliver the most efficient growth. Compare CAC for direct sales versus partner-sourced deals to determine optimal resource allocation. Use CAC analysis when deciding whether to invest in partner programs, when evaluating partnership ROI, or when choosing between building internal sales capacity versus scaling through channel partners. Monitor CAC trends as your partner ecosystem matures to validate that partner-led GTM actually reduces acquisition costs over time.
How It Works
Calculate CAC by dividing total acquisition costs by the number of customers acquired in a given period. For partner channel CAC, include partner program costs (enablement, marketing development funds, commissions, management overhead) plus any direct sales involvement in partner-sourced deals. Compare this to direct sales CAC which includes full sales team salaries, marketing spend, and sales tools. Track CAC separately by partnership type (referral partners, channel partners, technology partners) to identify which partner models deliver the best economics. Effective partner programs should show declining CAC as the ecosystem scales and partners become more productive.
Benefits for Partner Programs
Partner-sourced customers typically have lower CAC than direct-acquired customers because partners provide warm introductions, established trust, and shared marketing costs. In mature B2B partner programs, partner channel CAC can be 40-60% lower than direct sales CAC. Partners accelerate sales cycles through existing relationships, reducing the time and touches needed to close deals. Lower CAC through partnerships improves overall unit economics, allowing companies to grow faster with the same budget or achieve profitability sooner. For companies in partner marketplaces, demonstrating lower CAC through partnerships attracts more partners who want association with efficient go-to-market models.
CAC vs Customer Lifetime Value (LTV)
CAC measures how much you spend to acquire customers. Customer Lifetime Value (LTV) measures total revenue a customer generates over their relationship with your company. The LTV:CAC ratio determines profitability and growth sustainability. Healthy B2B businesses target LTV:CAC ratios of 3:1 or higher. Partner programs impact both metrics: they lower CAC through efficient acquisition and often increase LTV because partner-sourced customers have higher retention rates due to deeper ecosystem integration. Partner-led GTM strategies succeed when they improve LTV:CAC economics compared to direct-only models.
