Definition
The average fully loaded cost required to acquire one new paying customer.
Formula
Total sales & marketing spend / Number of new customers acquired
How to measure
Sum all marketing and sales spend, including tools and salaries, for a period and divide by the count of new paying customers won in that same period.
Why track it
CAC is the anchor for every profitability decision in acquisition; rising CAC with flat LTV is an early warning that growth is becoming unsustainable.
Example
A team spending $10,000 total to acquire 50 customers in a month reports a CAC of $200.
FAQ
- What is Customer Acquisition Cost?
- The average fully loaded cost required to acquire one new paying customer.
- How do you calculate Customer Acquisition Cost?
- Total sales & marketing spend / Number of new customers acquired
- Why track Customer Acquisition Cost?
- CAC is the anchor for every profitability decision in acquisition; rising CAC with flat LTV is an early warning that growth is becoming unsustainable.