Is There a KPI for Customer Acquisition Cost?

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“Is there a KPI for customer acquisition cost?”

Contractor University Expert Response:

“Yes, Customer Acquisition Cost (CAC) is a key KPI in HVAC acquisitions and tuck-ins and is typically evaluated alongside other performance metrics.

Typical residential HVAC CAC runs between $150–$350 per new customer, with a target LTV:CAC ratio of 3:1 or better.

During your due diligence, assess CAC for both the acquiring company and the target to evaluate marketing efficiency, customer quality, and integration opportunities. If the target’s CAC is higher, the combined company may reduce it by consolidating marketing, leveraging a stronger brand, or improving lead conversion.

Here’s a short list of key metrics to track in these scenarios:

Customer Acquisition Cost (CAC) – Marketing + sales cost per new customer

Customer Lifetime Value (LTV) – Gross profit value of a customer over time

Retention Rate & Maintenance Penetration – Measure recurring revenue strength

evenue per Technician & Gross Profit per Crew Day – Operational productivity

Marketing Efficiency Ratio (MER) – Overall marketing ROI

We have some additional resources in section 4.7 of the resource library, there you will find step by step strategies, along with valuation methods and tools.”

Contractor University members can click here to log in to their member dashboard and submit a question through the Ask the Expert portal.

”