CAC: customer acquisition cost, formula and example
CAC (Customer Acquisition Cost) is the average cost of acquiring one new customer over a period. There is Paid CAC (media + platforms) and Blended CAC (all acquisition costs), as well as Channel CAC by source. Agree on the period, the attribution window, and the definition of a "new customer."
What the Metric Measures
The effectiveness of investments in growing the customer base: comparing channels/campaigns, finding the point at which to scale the budget, and controlling payback via LTV/CAC and the Payback period.
Calculation
- CAC = Σ acquisition costs / Number of new customers
- Paid CAC = (media + platform fees + agency fees) / new customers from paid channels
- Blended CAC = (all marketing costs + share of sales costs + tools/creatives) / all new customers
- Payback (months) ≈ CAC / (ARPU × Gross margin, %) or CAC / monthly contribution profit
- LTV/CAC — the key benchmark for scaling
Agree on attribution (click/view, 7/28 days), accounting for coupons/cashback, VAT, and currency; exclude fraud/bots.
Calculation example
In a month 120,000 was spent on advertising and 80,000 on salaries of the marketer and acquisition managers, bringing 160 new customers. CAC = (120,000 + 80,000) / 160 = 1,250. Counting advertising alone gives 750 — an underestimate.
Data Sources
Advertising platforms, MMP/web analytics, CRM/billing (customer fact), ERP/1C (costs, salaries), call center trackers; unified reference lists of channels/UTM and a cost map.
Interpretation
- CAC growth = competition, creative fatigue, attribution errors, declining conversion
- CAC decline — check customer quality (retention, returns)
- Evaluate together with LTV, margin, and Payback
Useful Breakdowns
- Channels / campaigns / creatives / keywords
- Regions / devices
- First purchase / subscription / plan
- B2B: MQL → SQL → Won stages
Dashboard Visualizations
- Trend of CAC and Paid vs. Blended
- Channel CAC bars
- Scatter CAC ↔ LTV with thresholds
- Payback curve by channel
- Funnel Impressions→Clicks→Leads→Sales
- Waterfall of cost composition
How to Set Targets
Define CAC and LTV/CAC targets by channel/segment, CPC/CPA limits, a maximum Payback (e-commerce 1–3 months; services/SaaS 6–12 months), an incrementality testing plan, and an SLA for refreshing creatives.
Common Mistakes
- Using CPA per lead instead of CAC per customer
- Different attribution windows/currencies, double-counting of fees
- Including VAT or coupons in CAC (these are discounts)
- Ignoring fraud/bots
- Comparing unequal periods and seasonality
Questions for Discussion
- What maximum CAC ensures the target LTV/CAC?
- What will happen to CAC with a +20% budget?
- Which creatives/audiences deliver the best Payback?
- Where are the losses in the funnel, and how do they affect CAC?