Term · Marketing & analytics
CAC (customer acquisition cost)
CAC — customer acquisition cost — is the average cost of winning one new customer.
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Explained
CAC = (marketing costs + sales costs for acquisition) ÷ number of new customers
Costs include advertising, agency and tool fees, content production and, for a complete picture, the share of sales salaries spent on new customers.
Levels of CAC
- Blended CAC — all acquisition costs divided by all new customers.
- Paid CAC — advertising costs divided by customers from paid channels.
- Channel CAC — per channel: Google Ads, Meta, marketplaces, referrals.
Channel CAC requires knowing where each customer came from — see end-to-end analytics.
CAC vs CPA
CPA measures cost per action (for example, a lead); CAC measures cost per paying customer and usually includes more costs.
Using CAC
- Compare with LTV — how much profit a customer brings over time.
- Set maximum affordable CAC per channel.
- Track trends: rising CAC may signal saturation, competition or declining conversion.
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FAQ
Frequently asked questions
Should organic channels be included?
For blended CAC, yes — including content and SEO costs. For channel comparisons, calculate them separately.
How often should CAC be calculated?
Monthly or quarterly, using consistent definitions.