Term
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the average cost of winning one new customer. It is calculated as total marketing and sales spend divided by the number of new customers acquired in that period.
Customer Acquisition Cost (CAC) — explained in detail
Customer Acquisition Cost (CAC) states how much a company spends on average to win a single new customer. The basic formula is:
CAC = (marketing and sales costs) ÷ (number of new customers acquired) over a defined period.
Costs typically include ad budgets, marketing and sales salaries, tools used and agency fees. CAC is a central metric for judging whether an acquisition channel is economical, and it feeds into higher-level return measures such as return on investment.
CAC is most meaningful in relation to Customer Lifetime Value (CLV/LTV) — the expected total revenue or profit a customer brings over the duration of the relationship. The LTV:CAC ratio shows whether a customer brings in more than acquiring them costs. As a rough guide, a ratio around 3:1 is considered healthy in many business models; well below that (under 1:1) points to monetisation problems, while very high values (above 5:1) often indicate overly cautious growth.
Example / Practical relevance
A company spends EUR 30,000 on marketing and sales in a quarter and wins 150 new customers. CAC is EUR 30,000 ÷ 150 = EUR 200 per customer. If a customer brings on average EUR 700 of value over the relationship, the LTV:CAC ratio is 3.5:1 — a healthy figure.
In practice it pays to view CAC per channel and link it to upstream metrics such as cost per lead: a cheap lead is of little use if it rarely becomes a customer.
Distinction from similar terms
CAC measures the cost per acquired customer, whereas cost per lead captures only the cost per prospect (lead) — a lead is not yet a customer. CAC differs from ROAS because ROAS measures revenue per ad euro, not cost per customer. And while CAC quantifies acquisition cost, Customer Lifetime Value describes the revenue side — only together do they give a complete picture of acquisition economics.
Entdecke mehr
ROI (Return on Investment)
Top-level profitability KPI: profit relative to the investment made. Goes beyond pure ad spend and includes all relevant cost components.
LexikonReading email marketing KPIs in 2026 — open rate is dead, what counts now?
Open rate, CTR, CTOR, conversion rate, engagement score and revenue per email — what Apple MPP and iOS 18 distort and which metrics still hold up.
NewsBVDW guide 2026: two new KPIs for the AI-agent inbox
Germany's BVDW guide from 18 March 2026 introduces AI Agent Approval Rate and Meaningful Interaction Rate. What the KPIs are worth and what they change.