WHAT IS
CAC (CUSTOMER ACQUISITION COST)?

The formula is simple: CAC = (Total Marketing Spend + Total Sales Spend) / New Customers Acquired. But the simplicity hides a lot of detail. Most businesses calculate CAC wrong — typically too narrowly. A proper CAC calculation includes: paid ad spend (Meta, Google, LSAs), agency fees, tools and software (CRM, automation platforms), salaries of marketing and sales staff (allocated by % of time on acquisition vs retention), commissions, content production costs, and overhead allocated to marketing/sales. For local service businesses in 2026, typical CAC ranges by industry: - HVAC: $80–$300 per acquired service customer, $400–$1,200 per replacement system customer - Roofing: $400–$2,000 per signed contract (highly volatile based on storms) - Dental: $200–$800 per new patient (varies dramatically by treatment type) - Solar: $800–$3,500 per signed contract - Real estate: $1,500–$8,000 per closed transaction - Med spa: $80–$400 per new patient - Legal: $200–$5,000+ per signed case (PI cases can be $10K+) The single highest-leverage CAC reduction tactic for local service businesses is speed to lead. Going from 47-hour average response time (US small business average) to 91 seconds typically reduces effective CAC by 30–50% — because you stop losing leads that have to be re-acquired later. Other CAC reduction tactics in order of impact: (1) AI-driven lead qualification routing only qualified buyers to sales, (2) Multi-touch follow-up that captures 8–12 touches worth of conversion, (3) Database reactivation across past customers and dormant leads, (4) Conversion-engineered landing pages, (5) AI-optimized ad creative variation testing. The CAC reduction Thinxster clients typically see: 3.2× reduction within 90 days of deployment. That means a business with $400 CAC drops to ~$125 CAC — same revenue, much higher margin.