CAC (Customer Acquisition Cost)
The fully-loaded cost of acquiring a new paying customer.
Customer Acquisition Cost (CAC) is the total cost of acquiring a new paying customer, including ad spend, agency fees, tools, and allocated headcount. CAC = total acquisition-related cost ÷ new customers acquired.
Context
Blended CAC includes all channels combined. Channel-specific CAC attributes per-channel costs to per-channel conversions. Blended is the honest number; channel-specific is useful for optimization but prone to attribution inflation.
CAC alone is meaningless — it has to be evaluated against lifetime value (LTV) and payback window. A $1,000 CAC is a disaster for a $50 one-time purchase and a bargain for a $50,000 ACV enterprise deal.
A SaaS company with $200 CAC and $2,400 ARR per customer has an LTV:CAC ratio of about 12:1 (assuming 2-year retention) — very healthy. A DTC brand with $40 CAC and a $50 first-order value is probably not profitable unless repeat purchase brings LTV to $100+.
Fully-loaded CAC is what matters; the 'paid CAC' number often leaves out agency fees, tool costs, and marketing headcount. A business reporting $50 'paid CAC' may actually have $120 fully-loaded CAC once those are added back.
Related terms
LTV:CAC Ratio
Customer lifetime value divided by customer acquisition cost.
MER (Marketing Efficiency Ratio)
Total revenue divided by total marketing spend — a blended metric that resists attribution gaming.
CAC Payback Window
The number of months until a new customer's contribution margin equals the cost to acquire them.
Services that apply this
More Paid Media terms
ROAS (Return on Ad Spend)
Revenue divided by ad spend — the most reported and most misleading paid metric.
CPM (Cost per Mille)
Cost per 1,000 impressions — the core pricing unit for paid media.
CPC (Cost per Click)
The cost of a single click on a paid advertisement.
CPA (Cost per Action/Acquisition)
The average ad cost per conversion event — the core paid efficiency metric.