Customer Acquisition Cost
Definition
Customer Acquisition Cost: Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including marketing, sales, and onboarding expenses. CAC is calculated by dividing total acquisition costs by the number of new customers acquired in that period. Efficient CAC is crucial for profitable growth.
Example Usage
“Our blended CAC is $200, with paid channels at $350 and organic at $50.”
Common Misconceptions
Related Terms
Customer Lifetime Value
Customer Lifetime Value (LTV) is the total revenue a business can expect from a single customer account over the entire relationship. LTV is calculate...
CAC Payback Period
CAC payback period is the number of months required to recover the cost of acquiring a customer. It's calculated by dividing CAC by the monthly gross...
LTV to CAC Ratio
The LTV to CAC ratio compares customer lifetime value to the cost of acquiring that customer. A ratio of 3:1 or higher is generally considered healthy...
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