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CAC

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CAC Formula: Marketing Investment / New Customers

FAQs

What is CAC and how is it calculated?

Customer Acquisition Cost (CAC) indicates how much a company invests in marketing and sales to acquire a new customer. It is calculated by dividing the total marketing and sales expenditure during a period by the number of new customers acquired during that same period. For example, if you invest €10,000 per month and acquire 100 new customers, your CAC is €100.
What is considered a good CAC?

There is no single, universally accepted value, as CAC should always be evaluated in relation to the customer's LTV. As a reference, an LTV:CAC ratio of 3:1 or higher is considered healthy. If your CAC is higher than your LTV, the business is not sustainable in the long term.
What is the difference between CAC and CPL?

Cost per lead (CPL) measures the cost of acquiring a lead or interested contact, while customer acquisition cost (CAC) measures the cost of converting that lead into a paying customer. CAC includes all marketing and sales costs, not just advertising, thus providing a more comprehensive view of the efficiency of the acquisition process.

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