Customer Acquisition Cost (CAC)
Customer acquisition cost (CAC) is the average amount a business spends to win one new customer. Add the marketing, advertising, and sales costs used to find those customers, then divide by the number of customers acquired. If a campaign costs $10,000 and brings in 200 customers, the CAC is $50. Satisfied customers who refer friends can lower that cost, because the next customer arrives with less advertising. The number alone does not say the marketing paid off.
Compare it with customer lifetime value: the spend makes sense when what the customer is worth over time is higher than the cost to win them.
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