Paid Media

CAC

Quick answer

Customer acquisition cost - the full cost to win one new customer.

Definition

CAC is total sales and marketing cost divided by new customers acquired in the period. Done honestly it includes ad spend, tool costs and team cost - not just the ad platform's reported number. CAC is the anchor metric for every budget decision we make.

Why it matters

Platforms report cheap conversions; businesses bank real CAC. The gap between the two is where unprofitable growth hides.

Formula

Total acquisition cost / New customers

Benchmarks

Healthy D2C targets LTV:CAC of 3:1 or better

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