Marketing glossary
What is CAC (Customer Acquisition Cost)?
CAC (Customer Acquisition Cost): The total cost of winning one new customer, including ad spend, agency or team costs, and tools.
CAC = total acquisition costs ÷ new customers in the same period. Compare it with LTV: a healthy business usually earns several times its CAC over a customer’s lifetime.
Related terms
- CPA (Cost Per Acquisition)The average cost to get one conversion, such as a lead, booking, or sale. Calculated as ad spend divided by conversions.
- LTV (Customer Lifetime Value)The total revenue (or profit) a business can expect from one customer over the entire relationship.
- ROAS (Return on Ad Spend)Revenue generated for every dollar spent on ads. A ROAS of 4 means $4 in revenue for every $1 of ad spend.