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Customer acquisition cost

What is CAC (customer acquisition cost)?

CAC (customer acquisition cost) is the total sales and marketing spend it takes to win one new customer.

Formula

CAC = sales and marketing spend ÷ new customers

Spend $15,000 on marketing in a quarter, win 320 new customers, and your CAC is $46.88. If each customer brings $140 of lifetime gross profit, they pay back about three times over.

Work out yours with the CAC calculator.

A real store example

Skin Laundry laser facial page: over 600 Meta ads linked here.

The offer is a first Signature Laser Facial for $50, a $275 value, at 56 clinics. A discounted first visit is a deliberate trade: it raises the cost of winning each customer in exchange for one who comes back at full price.

Open the pageSee their ads

How to improve CAC on your store

  1. Count every cost

    Ads, creator fees, agency retainers and first-order discounts all belong in CAC. Leaving one out makes growth look cheaper than it is.

  2. Convert more of the traffic you pay for

    A page that turns more visits into first orders lowers CAC across every channel at once.

  3. Earn the second order

    CAC pays back through repeat purchases, so a follow-up offer matters as much as the first sale.

Ask Replo: "email me blended CAC every Monday".

Report my CAC

CAC questions

What is a good CAC?
A good CAC is below the lifetime gross profit a customer brings, and the faster it pays back the better. If the first order's gross profit covers CAC, every repeat order is profit.
What is blended CAC?
Blended CAC divides all marketing spend by all new customers, including those from search, word of mouth and social posts. It's lower than paid CAC and shows what the whole program costs per customer.
How is CAC different from CPA?
CAC counts every sales and marketing cost per new customer. CPA usually counts ad spend per conversion, which can include repeat orders. Use CAC to decide whether growth pays.

Related terms

Browse the glossary

LTV

LTV (customer lifetime value) is the total revenue or profit you expect from one customer over the whole relationship.

CPA

CPA (cost per acquisition) is the ad spend it takes to win one conversion, such as a purchase or signup: ad spend divided by conversions.

MER

MER (marketing efficiency ratio) is total store revenue divided by total marketing spend, across every channel.

Churn rate

Churn rate is the share of customers or subscribers who stop buying in a given period.

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