Customer acquisition cost (CAC)
Customer acquisition cost (CAC)
Customer acquisition cost is the cost included in acquiring customers divided by the number of customers acquired under an agreed method.
How it works.
A business may include media, creative, agency, sales and tooling costs in a fully loaded calculation. A media-only calculation answers a narrower question. State the cost scope and how the customer count relates to the period.
What to watch for.
Do not call media cost per customer a complete CAC without explaining the exclusions. A sales cycle crossing reporting periods can also make a simple monthly division misleading. Cohort-based analysis may better reflect the journey.
Put the definition to work.
Use the calculation alongside contribution, retention and the business model. CAC alone does not establish profitability or the value of a new customer.