Customer Acquisition Cost (CAC)
CACproprietary metricAlso known as: Customer Acquisition Cost; Client Acquisition Cost; Acquisition Cost per Customer
Customer acquisition cost (CAC) is the average sales and marketing cost incurred to acquire a new customer during a defined period.
Technical explanation
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.
Business relevance
CAC connects go-to-market spending with customer growth and helps teams assess channel efficiency, payback, unit economics and the sustainability of acquisition.
Implementation example
A business attributes £180,000 of sales and marketing costs to a quarter and acquires 300 new customers, producing a blended CAC of £600.
Limitations and common misconceptions
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.
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