What is Customer Acquisition Cost (CAC)?

CAC is how much you spend to acquire a customer, calculated by dividing your sales and marketing costs by the number of new customers. Track this by channel—your CAC from content marketing is probably different from paid ads or outbound sales.

How many lead sources do I need?

At minimum, two. A single source is a single point of failure. If that channel changes (algorithm update, conference cancelled, key partner leaves), your pipeline dries up. Diversification isn't just smart—it's survival.

What if most of my deals come from my network?

That's normal in early stages, but it doesn't scale. Start testing one cold channel now—outbound email, content, paid, or partnerships. You need proof that strangers will buy before your network runs out.

How do I pick which demand channel to test?

Go where your buyers already are. If they're on LinkedIn, start there. If they read industry publications, try content. If they respond to cold email in your space, try outbound. Don't pick a channel because it worked for someone else—pick one that matches your buyer's behavior.

Demand

Can you find leads beyond your network?

Demand generation is finding potential customers outside your existing network. Most founders exhaust their warm intros within 6-12 months. Sustainable growth requires channels that work whether or not you know someone who knows someone.

Answer 4 diagnostic questions to see where you stand.

Find out where you stand

What this measures

Where do your leads come from?
What percentage of your pipeline comes from outside your personal network?
Do you know how much it costs to acquire a customer from each channel?
This is your Customer Acquisition Cost (CAC) by channel.
If your top lead source disappeared tomorrow, what would you do?

What to do about it

If this area is broken

Pick one channel and run a focused experiment for 30 days.

If this area needs work

Double down on your best channel. Track acquisition cost by source.

How this connects

Depends on

Problems here often trace back to gaps in:

Frequently asked questions about demand

What is Customer Acquisition Cost (CAC)?: CAC is how much you spend to acquire a customer, calculated by dividing your sales and marketing costs by the number of new customers. Track this by channel—your CAC from content marketing is probably different from paid ads or outbound sales.
How many lead sources do I need?: At minimum, two. A single source is a single point of failure. If that channel changes (algorithm update, conference cancelled, key partner leaves), your pipeline dries up. Diversification isn't just smart—it's survival.
What if most of my deals come from my network?: That's normal in early stages, but it doesn't scale. Start testing one cold channel now—outbound email, content, paid, or partnerships. You need proof that strangers will buy before your network runs out.
How do I pick which demand channel to test?: Go where your buyers already are. If they're on LinkedIn, start there. If they read industry publications, try content. If they respond to cold email in your space, try outbound. Don't pick a channel because it worked for someone else—pick one that matches your buyer's behavior.

Find out where you stand Or take the full diagnostic