Marketing & Acquisition
CAC (Customer Acquisition Cost)
The total cost of acquiring a new customer, including all marketing and sales expenses.
Formula
CAC = Total Marketing & Sales Costs / Number of New CustomersWhat is CAC?
Customer Acquisition Cost (CAC) measures how much it costs to acquire a single new customer. It includes all marketing spend, advertising costs, sales team costs, and any other expenses directly related to customer acquisition.
CAC vs. CPA
CAC is a broader metric than CPA (Cost Per Acquisition). CPA typically refers to the cost per conversion on a specific channel. CAC includes all channels and overhead costs.
How to Reduce CAC
- Improve conversion rates on your website
- Optimize ad targeting and creative
- Invest in organic channels (SEO, content, referrals)
- Improve customer retention (reducing reliance on new acquisition)
Example
You spend $10,000 on marketing in a month and acquire 200 new customers. CAC = $50.
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