What is CAC?

CAC stands for Customer Acquisition Cost.

CAC is what you spend on marketing to win one new customer: marketing spend ÷ new customers.

Example

$5,000 of marketing that brings 100 new customers is a CAC of $50.

Why it matters

CAC only makes sense next to customer value — compare it with LTV.

Calculate it: CAC & LTV Calculator

Acquisition cost vs customer lifetime value

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Flashcard

Question

What is CAC (Customer Acquisition Cost)?

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Answer

CAC is what you spend on marketing to win one new customer: marketing spend ÷ new customers.

Related terms

LTV

LTV (or CLV) is the profit a customer brings over their whole relationship with your store. A practical formula: AOV × orders per year × gross margin × years.

AOV

AOV is the average amount a customer spends per order: revenue ÷ number of orders.