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Marketing Concepts
#
AN-006

Customer Acquisition Cost (CAC)

Analytics
the concept

The total sales and marketing cost of winning one new customer: spend divided by new customers in the same period. Also written CoCA. Compared against LTV, it tells you whether growth is profitable.

When to use

When setting budgets and bid targets, comparing channels, reporting to leadership, and judging whether a campaign is worth scaling.

Applies To
Paid
Search
Social
Email
In Action (the tape)

$12,000 in ads, tools and sales time producing 40 customers is a $300 CAC; a 3:1 LTV:CAC benchmark in SaaS; CAC by channel showing referrals at $40 and paid social at $410.

the ref's call
10

A must-track number for every business that spends to grow. Flagged when it counts only ad spend, or when one blended number hides an expensive channel.