Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the total sales and marketing spend divided by the number of new customers gained. It helps you determine profitability and plan efficient growth strategies.

Simple calculation: Total spend on acquisition / Number of new customers

Example:

• Monthly marketing: $10,000
• Sales costs: $5,000
• New customers: 30
• CAC = $15,000 / 30 = $500 per customer

Compare CAC to customer lifetime value (LTV) to assess business health.