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Customer acquisition costThe average cost to acquire one new customer.
CAC (customer acquisition cost) is total sales and marketing spend divided by the number of new customers won. Unlike CPA (per order), CAC is per customer — who may buy again — so it pairs with LTV to show whether acquisition is profitable over time.
Formula
CAC = Sales & marketing spend ÷ New customers
Example: $10,000 spend for 400 new customers = $25 CAC.
What a good result depends on
Judge it against LTV — a healthy LTV:CAC is around 3:1.
Common mistakes
- Leaving out non-ad acquisition costs (tools, agency, creative).
- Comparing CAC to first-order revenue instead of LTV.