Definition
CAC (Customer Acquisition Cost) is the sales and marketing cost included in the calculation divided by new customers in the same period. Specify the scope, such as ad spend only or fully loaded acquisition cost.
Also called: Customer Acquisition Cost, Cost of acquisitionAcquisition cost meets customer value.
Linear illustration with constant contribution per purchase. Actual purchase timing, returns and customer churn can change the outcome.
Example: acquisition costs of €30,000 and contribution of €250 per purchase. Existing customers are excluded from the CAC denominator.
Count new customers
Acquisition costs of €100,000 and 200 new customers give CAC of €500. Repeat orders from existing customers do not count as new customers.
Using all orders as the denominator gives cost per order, not customer acquisition cost.
Define the costs included
Ad-spend-only CAC cannot be compared directly with a calculation including salaries, agency fees and production. Align the period, customer definition and cost basis.
Compare CAC with contribution and payback
Assess CAC against expected customer contribution and the time required to recover acquisition cost. Revenue and future repeat purchases are not available cash.
For scaling, examine marginal CAC too. If costs rise from €100,000 to €200,000 and new customers from 200 to 320, the additional 120 customers cost around €833 each.
Frequently asked questions
How do CAC and nCAC differ?
CAC should already use new customers. Some reports use nCAC to make this explicit. Always check whether costs are fully loaded or include only advertising.
Is CLTV:CAC of 3:1 always a good target?
No. An appropriate ratio depends on the contribution definition, payback, fixed costs and uncertainty in future purchases.
From insight to action
See how it applies in practice.
Website, channels and profit measurement
The Løgbutikken engagement covered the website, email, Meta, Google Ads and ProfitMetrics. The business grew and was subsequently acquired.
Read the caseMeasurement and customer economics
Discuss measurement and bidding
We review the values you measure and how they can inform budget decisions.
Choose a time30 minutes · No obligation
About the author
Nicklas Segatz Mortensen
Growth hacker and fractional CMO with 10+ years' experience and hundreds of millions in managed ad spend behind him. Background from larger Danish and international scale-ups, and from the agency world.
Meet the team