Do You Include Salaries in CAC?
Yes! Customer Acquisition Cost should include every full-time sales and marketing person should be included in CAC without question.
To quote from Hubspot:
“The total sales and marketing cost includes all program and marketing spend, salaries, commissions, bonuses, and overhead associated with attracting new leads and converting them into customers.”
Imagine a startup hires their first full-time marketer and wants them to write a blog post every week. What cost should be attributed to their new blog post, which is written, edited, and published in-house?
The cost is not zero, as clearly you are spending money every month - on their salary, on taxes and fees, on software to facilitate their job, and more. There is time and money being invested in every step of the content creation pipeline.
Furthermore, as your business grows, you will have multiple strategies working together. Your SEO will benefit from your paid ads and vice versa.
Again, you have to think about your total investment into customer acquisition and not just a single campaign or a single strategy with costs that are easy to track (e.g., paid ads).
Another question that comes up frequently is how to handle someone who spends a portion of their time doing sales and marketing activities (e.g., a cofounder). In this case, we recommend attributing 25%, 50%, or 75% of their fully burdened cost to CAC.
In our experience, there is limited value going to more granular allocations of time.