Customer Acquisition Cost

Also called CAC

What it costs you, all in, to win one new paying customer: the sales and marketing spend over a period divided by the customers it brought in. It is the price of growth.

CAC = total sales and marketing spend / new customers acquired in that period

Why it matters

If you do not know your CAC you cannot tell whether growth is making you money or quietly burning it. Read next to what a customer is worth over time, it decides whether a channel is worth scaling.

Related terms

Lifetime Value CAC Payback Period Unit Economics
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