GLOSSARY

The average sales and marketing cost incurred to acquire a new customer during a defined period.

CAC connects go-to-market spending with customer growth and helps teams assess channel efficiency, payback, unit economics and the sustainability of acquisition.

A business attributes £180,000 of sales and marketing costs to a quarter and acquires 300 new customers, producing a blended CAC of £600.

CAC changes materially with cost scope, attribution, sales-cycle length and customer definition. Blended averages can hide channel or segment differences, and CAC should not be interpreted without margin, retention and lifetime value.

Basic CAC equals eligible acquisition costs divided by new customers acquired in the same period. A robust definition specifies included media, salaries, commissions, software, agency and overhead costs, the attribution window, and whether the calculation is blended or segmented.