CAC

What This Page Answers

CAC, or customer acquisition cost, measures how much it costs to acquire a customer. Unlike campaign CPA, CAC should reflect business-level acquisition economics, not just platform-reported conversions.

Formula

CAC = total acquisition cost / new customers acquired

Acquisition cost may include ad spend, agency fees, tools, creative production, sales costs, discounts, and other costs depending on how the business defines CAC.

CAC vs CPA

MetricMeaning
CPACost per tracked platform action
CACCost to acquire an actual customer

A $30 lead CPA may produce a $300 CAC if only one in ten leads becomes a customer.

What Makes CAC Useful

CAC is useful when paired with:

  • LTV

  • Payback period

  • Contribution margin

  • New customer rate

  • Sales close rate

  • Retention

A CAC target should come from unit economics, not a platform benchmark.

Practical Rule

Use CPA to optimize campaigns. Use CAC to decide whether acquisition is economically sustainable.