Finance & Moneyadvanced
CAC
Customer Acquisition Cost
Definition
The total cost of winning one new customer, including all marketing spend, ad costs, tools, and time. CAC = Total marketing spend ÷ Number of new customers acquired.
Why it matters
If your CAC is higher than your LTV, you are losing money on every customer. Knowing your CAC helps you understand which channels are profitable.
Example
You spend £1,000 on ads and £200 on tools in a month and acquire 30 new customers. CAC = £1,200 ÷ 30 = £40 per customer.
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