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Customer Acquisition Cost (CAC)

By Dan Kurtz 1 min read

Customer acquisition cost is the total marketing and sales expense divided by the number of new customers acquired in that period. It’s the price you pay to bring one customer in the door.

CAC only means something in the context of LTV. A high CAC is fine if the customer is worth much more. A low CAC is bad if the customer churns after two months. The ratio matters, not either number alone.

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