CAC · customer acquisition cost
CAC (customer acquisition cost) is the total amount spent to acquire a new customer, marketing and sales included, divided by the number of customers won.
The formula
CAC = Acquisition spend ÷ Number of customers acquired
A concrete example
Example
$5,000 of acquisition budget for 10 new customers: CAC = 5,000 ÷ 10 = $500.
Why it matters
CAC means nothing on its own: it is judged against customer lifetime value (LTV). A $500 CAC is healthy if a customer returns $2,000 of margin, untenable if they return $300.