CAC is customer acquisition cost, the total cost required to acquire a new paying customer.
Example of CAC
Example: If a business spends $30,000 on sales and marketing in a month and gains 60 new customers, CAC is $500. That number should be compared against lifetime value, margin, and payback period.
Why CAC matters
It matters because strategy keeps channels from competing with each other. When this concept is clearly defined, the team can connect budget, audience, creative, offer, tracking, and reporting to revenue instead of chasing disconnected metrics.
Related terms
Frequently Asked Question
What does CAC mean?
CAC means customer acquisition cost, the total cost required to acquire a new paying customer.