CAC
customer acquisition costCAC (customer acquisition cost) is the total cost of winning one new customer. It counts marketing and sales costs over a period, divided by the number of new customers won in the same period.
Good to know
CAC is a more honest number than cost per lead or per conversion, because it includes salaries and tools. Alone it still says nothing: a 200 € CAC is excellent if a customer produces 2,000 € over their lifetime, and unsustainable for a one-off 300 € sale. That is why CAC is always read together with lifetime value.
CAC comes in two versions: blended CAC counts all new customers, paid CAC only those advertising brought. The blended number flatters as referrals and organic grow, so channel decisions need paid CAC. Investors read CAC alongside growth rate: a high CAC with strong retention often beats a low CAC with weak retention.
FORMULA
How CAC is calculated
CAC is total sales and marketing costs divided by the number of new customers from the same period.
CAC = (marketing + sales) ÷ new customers
As a healthy rule of thumb, lifetime value should be at least three times CAC.
EXAMPLE
One new customer cost 250 euros to acquire. The number is only good or bad against lifetime value.
PITFALLS
Two ways to misread CAC
The blended number hides channel differences
As organic grows, blended CAC falls even if advertising gets pricier. Compute paid CAC separately before budget decisions.
Payback time goes uncalculated
A lifetime value three times CAC does not help if the money returns in two years and the cash runs out next month.
The window is chosen too short
Monthly CAC swings with individual campaigns. A quarter is the shortest window worth drawing conclusions from.
FREQUENTLY ASKED
Frequently asked questions
What is the difference between CAC and CPA?+
CPA measures the ad cost of one conversion, CAC the full acquisition cost including salaries and tools. CAC is always higher.
What is a good CAC?+
One that lifetime value covers at least three times over. In SaaS, teams also track how many months it takes to pay CAC back.
How do I bring CAC down?+
Improve conversion rate at every step of the path, grow the share of referrals and organic channels, and target advertising more precisely.
What is the difference between blended and paid CAC?+
Blended divides costs across all new customers, paid only across those advertising brought. The first describes business efficiency, the second advertising.
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Maintained by the VSCY editorial team · Updated 6 Aug 2026 · Part of the marketing glossary (99 terms)
