Unit Economics: Calculating Your Customer Acquisition Cost (CAC) in Naira
Unit economics explain why some startups grow confidently while others run out of money despite rising revenue. Growth feels exciting …
Unit economics explain why some startups grow confidently while others run out of money despite rising revenue.
Growth feels exciting until the money starts running out.
Many Nigerian startups acquire customers every week yet still struggle to pay bills at the end of the month. The problem is rarely effort. It is usually visibility. Without understanding unit economics, founders grow blindly, unaware that each new customer may be costing more than they are worth.
Customer acquisition cost, or CAC, is one of the clearest ways to understand whether your growth is helping or hurting your business.
Economics Matter More Than Revenue
Revenue can be misleading.
A startup earning ₦5 million monthly may look healthy, but if acquiring customers costs ₦4.5 million, the margin for survival is thin. Unit economics cut through this illusion by focusing on one customer at a time.
They answer a hard question:
Does growth improve your business, or does it quietly drain it?
Founders who understand this early make calmer decisions around pricing, hiring, and marketing.
What Exactly Is Customer Acquisition Cost?
Customer acquisition cost represents everything you spend to bring in a new customer.
This often includes:
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- Digital advertising spend
- Sales salaries and commissions
- Marketing tools and software
- Agency or consultant fees
- Promotional discounts tied to acquisition
It usually excludes:
- Customer support
- Product development
- General administrative costs
Precision matters. Overlooking costs makes CAC look better than reality, which leads to poor decisions.
How to Calculate CAC in Naira (Simple Example)
The formula itself is straightforward:
CAC = Total sales and marketing spend ÷ Number of new customers acquired
Example
Let’s say in one month you spent:
- ₦450,000 on ads
- ₦300,000 on sales staff
Total spend = ₦750,000
If you acquired 25 new customers:
CAC = ₦750,000 ÷ 25 = ₦30,000 per customer
That single number becomes a reference point for evaluating growth channels and pricing.
Common CAC Mistakes Founders Make in Nigeria
Mixing Time Periods
Spending from one month and customers from another distorts CAC. Always align both.
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Ignoring Currency Reality
Calculating CAC in dollars while spending in naira hides real risk, especially during currency volatility.
Chasing Cheap Customers
Low CAC channels sometimes attract customers who churn quickly. Cheap acquisition is not always profitable acquisition.
Strong unit economics balance cost, quality, and retention.
How to Interpret CAC in the Real World
CAC alone does not tell the full story.
You must compare it with:
- How much a customer pays over time
- How quickly they pay
- How long they stay
A higher CAC may be acceptable if customers generate consistent revenue and pay promptly. A lower CAC can still be dangerous if customers disappear quickly.
Context turns CAC from a number into insight.
How Better Visibility Improves Unit Economics
Most founders do not overspend intentionally. They simply lack clarity.
When you can see CAC trends clearly:
- Waste becomes obvious
- Marketing decisions improve
- Pricing conversations become grounded
- Growth planning becomes calmer
Visibility transforms anxiety into control.
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How Zaccheus Helps Founders Track CAC Automatically
Zaccheus acts as an AI CFO that connects spending, revenue, and customers in one place.
It helps founders:
- Track CAC in naira automatically
- See trends before cash runs tight
- Understand unit economics without spreadsheets
- Make growth decisions with confidence
Instead of guessing, you see the true cost of every customer.
Conclusion
Growth without understanding cost is risky.
Unit economics force founders to slow down and ask better questions about sustainability. When customer acquisition cost is clear, decisions around marketing, pricing, and expansion become smarter and calmer.
Zaccheus helps founders understand their unit economics in real time, so growth strengthens the business instead of quietly draining it.
Explore Zaccheus and gain clarity on what each customer truly costs.
