Customer Acquisition Cost (CAC) is a critical growth marketing metric representing the total average expense a business incurs to acquire one new paying customer. It includes all marketing expenditures, sales costs, advertising spend, technology fees, and associated overhead during a specific period. CAC helps companies understand the financial effectiveness of their customer acquisition strategies, optimize marketing budgets, and forecast profitability. Keeping CAC lower than customer lifetime value (LTV) ensures sustainable growth and long-term success.
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