Analytics
What is Customer Acquisition Cost?
Also called: CAC
Customer acquisition cost is the total sales and marketing spend divided by the new customers it won. It shows what each customer costs to earn.
Customer acquisition cost, or CAC, is how much you spend to win one new customer. You add up your marketing and sales costs for a period, such as ads, tools and the time of the people involved, then divide by the number of new customers in that period.
It is different from cost per lead because not every lead becomes a customer. CAC includes the whole path, so it tells you whether growth is actually profitable. A lead that costs little but rarely buys can still produce an expensive customer.
CAC means the most when compared with what a customer is worth to you over time. If the lifetime value is comfortably higher than the cost to acquire, you can grow with confidence. We help you set up the tracking to calculate it honestly.
Example
If you spend a set amount on ads and sales time in a month and win ten new customers, divide that total by ten to get your CAC.
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