Your Sales Funnel is Leaking: What Cost-of-Acquisition Can Teach You
Do you know what it really costs to land a new client?
Most MSP owners don’t. They track “leads,” they track “sales,” but they don’t connect the dots on how much every signed contract actually costs to acquire.
That blind spot means your sales funnel is leaking money — and you may not even see it.
Here’s why tracking your cost of acquisition (CAC) isn’t just a sales exercise — it’s a valuation strategy.
Why Cost of Acquisition Matters More Than You Think
A messy funnel doesn’t just waste marketing dollars — it drags down your entire business.
Every unqualified lead your sales team pursues burns time and budget.
Every “bad-fit” client you sign erodes margin and morale.
Every month you spend guessing instead of measuring means less clarity on what’s working.
Bottom line: Buyers don’t just look at revenue — they look at whether you have a repeatable, efficient sales engine.
How to Actually Calculate CAC
The math is simple — but few MSPs do it:
CAC = (Total Sales & Marketing Costs) ÷ (New Clients Signed)
What to include:
Sales salaries & commissions
Marketing spend (ads, campaigns, events)
Tools, CRM, and outsourced services
Pro Tip: Track CAC by channel. You might find trade shows bring cheaper clients than paid ads — or vice versa.
Use CAC to Fix Your Funnel
Once you know CAC, you can start fixing leaks.
Qualify better. Stop chasing every lead — focus on the right-fit clients.
Align sales & ops. Don’t sell work your team can’t deliver profitably.
Reallocate spend. Double down on channels with the best CAC and cut the rest.
Think of CAC like fuel efficiency for your plane — the better you measure it, the further you can go with the same fuel.
Key Takeaways
Knowing your CAC turns sales from a gamble into a growth engine.
CAC isn’t just a marketing metric — it’s a valuation driver that proves you can scale profitably.
MSPs with a clean, efficient funnel keep more margin — and attract better buyers.
Want to find and fix the leaks in your sales funnel?
Join a Value Creation Academy cohort and learn how to track CAC, refine your funnel, and build a sales engine investors love.