CAC (Customer Acquisition Cost)
Definition
The average cost to acquire one new customer, including ad spend and other marketing costs.
Want a deeper explanation?
Formula
CAC = Total Acquisition Spend ÷ New Customers AcquiredCAC tells you what it costs to win a customer. It matters most when you compare it to what that customer is worth over time, because a high CAC is fine if customers come back and buy again.
Count only new customers, and include all the costs of getting them, not just ads. Watch for: CAC creeping up as you scale, which is normal to a point but can quietly turn growth unprofitable.
Example
$30,000 in marketing that brings in 750 new customers gives a CAC of $40.