Performance
CAC (Customer Acquisition Cost)
CAC is the total sales and marketing cost of acquiring one new customer, usually calculated by dividing total spend by the number of new customers gained.
Definition
Customer Acquisition Cost totals every sales and marketing dollar spent over a period, then divides it by the number of new customers won — a core unit-economics metric.
Why It Matters
CAC has to stay meaningfully below customer lifetime value for a business to be sustainable — it's one of the first numbers investors and founders check.
Real-World Example
D2C brands closely track CAC by channel — Meta ads, Google Shopping, influencer partnerships — to know exactly where their next rupee of marketing spend is best invested.
How It Connects
CAC connects performance marketing, funnel conversion rates, and overall business unit economics.