📣 Origin: Marketing★☆☆
CAC
Customer Acquisition Cost
How much it costs, on average, to win a new customer.
What it is
CAC adds up everything spent to attract and convert customers (ads, tools, part of the sales team's salary) and divides it by the number of customers won in that period.
CAC = Total spent on acquisition / Number of customers won
Where else it shows up
💰 Finance
Compared to LTV to find out whether the business model is sustainable in the long run.
Example: If CAC is $300 and the customer only generates $250 of profit over time (LTV), the business is losing money on every sale.
🤝 Sales
Used to evaluate whether it's worth investing more in a specific prospecting channel.
Example: The CAC of leads from referrals is half the CAC of cold leads — the team starts prioritizing referrals.
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