What is CAC?

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing and sales expenses. It represents how much your company spends, on average, to acquire a single customer.

Why CAC Matters

CAC is a critical metric for evaluating business sustainability and growth potential. It helps you:

• Determine if your business model is viable
• Evaluate the efficiency of your marketing and sales efforts
• Make informed decisions about marketing budget allocation
• Compare performance across different channels and campaigns
• Set appropriate pricing strategies

When to Use CAC

CAC is most valuable when:

• Comparing it to Customer Lifetime Value (LTV) to ensure profitability
• Evaluating the performance of different marketing channels
• Planning marketing budgets and forecasting growth
• Seeking investment or funding (investors closely examine CAC)
• Optimizing your sales and marketing processes