When it comes to CAC payback calculations, many businesses think they’ve nailed it, only to find out they’ve made some key mistakes. We've seen this with loads of clients. Here are the common pitfalls to avoid.

First, not calculating fully loaded CAC. One of the most common mistakes is to count just direct customer acquisition costs such as advertising and exclude salary payments to sales, marketing, PR, and other personnel who are indirectly involved in acquiring customers. Just because they can’t be directly attributed to the acquisition of a specific customer, doesn’t mean they haven’t been paid for that. CAC payback is always calculated at full cost, meaning the actual cost of acquiring a customer.

Remember to benchmark correctly. Just because your own CAC payback looks impressive, it’s meaningless unless you compare it with industry standards. Industry benchmarks vary, and what’s good for one sector might be bad for another.

Another mistake is not accounting for discounts and promotions. If you are heavily discounting to get customers in the door, this needs to be considered. Without it, you’ll be underestimating the true CAC, showcasing a false sense of efficiency.

Lastly, make sure you keep your CAC calculations up to date. For example, changes to market conditions, customer behavior, and your company evolve and thus, if left untouched, your CAC will keep changing over time. It is important to visit your CAC regularly and recalculate it to make sure you stay on course.