Glossary / Customer acquisition cost (CAC)
What is Customer acquisition cost (CAC)?
Customer acquisition cost is what it costs to win one new customer. Divide total sales and marketing spend by the new customers you gained.
Take everything you spent on winning customers in a period: ads, tools, agency fees, the wages of the people doing the work. Divide that by the number of new customers you actually gained. That is your CAC.
CAC only means something next to what a customer is worth over their whole time with you. If a customer brings in 400 dollars over two years and costs 90 dollars to acquire, the math works. If they cost 500, it does not.
Be honest about what goes into the top of the calculation. Leaving out wages and software makes CAC look flattering, and a losing channel keeps getting funded because the number said it was fine.
In Creaiter
Creaiter's campaign dashboards and conversion tracking give you the customer count side of the calculation, so you are not rebuilding it from memory.
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