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What is customer acquisition cost?

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Quick answer

Customer acquisition cost (CAC) is the average amount a business spends to gain one new customer. You calculate it by dividing total sales and marketing costs by the number of new customers won — a key gauge of marketing efficiency.

Key things to understand

  1. CAC is the average cost to win one new customer.
  2. Calculated as sales + marketing spend ÷ new customers.
  3. Lower CAC means more efficient growth.
  4. It's compared against customer lifetime value (CLV).

People also ask

What is customer acquisition cost?
The average amount a business spends on sales and marketing to gain one new customer.
How do you calculate CAC?
Divide total sales and marketing costs over a period by the number of new customers acquired in it.
Why does CAC matter?
If it's higher than the value a customer brings (CLV), growth loses money — so it gauges sustainability.