CAC (Customer Acquisition Cost)
Quick answer
What is cac (customer acquisition cost)?
The total amount spent, on average, to turn one stranger into one paying customer.
Also called: Customer acquisition cost, Cost per acquisition.
How to calculate cac (customer acquisition cost)
CAC = total sales and marketing spend ÷ new customers acquired
Worked example: $3,000 in ad spend producing 25 customers = $3,000 ÷ 25 = $120 CAC.
Compare CAC against LTV: if CAC is close to LTV, growth costs more than it returns.
In plain English
CAC includes ad spend, tools and often time, divided by the number of customers acquired in that period. It's only a healthy number when it's comfortably lower than a customer's lifetime value.
Example
$3,000 spent on ads in a month that produced 20 customers = $150 CAC.
Why it matters
The Funnel Math Calculator shows CAC alongside ROAS so you can see, before you scale spend, whether the math actually works.
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