Calculating CAC for India: The Hidden Costs
Direct marketing spend is only half the story. Are you accounting for GST, sales commissions, and support overheads in your CAC?
Founders often tell me, "Our CAC is just ₹500 from Meta Ads." But when we dig into the bank statements, the real cost of acquisition is closer to ₹1200. Where does the rest go?
1. The GST Trap
Are you calculating your margins pre-GST or post-GST? In India, your CAC spend often includes non-claimable GST if not handled correctly, and your revenue should always be looked at net of tax.
2. The 'Inside Sales' Overhead
In the Indian B2B landscape, most sales aren't self-serve. You have SDRs, account executives, and demo specialists. Their salaries are 100% part of your Customer Acquisition Cost.
3. Blended vs. Paid CAC
Never rely solely on Blended CAC. It hides the inefficiency of your paid channels. If your Paid CAC is higher than your LTV, your 'organic growth' is just a band-aid on a bullet wound.