FormulaCAC = total marketing and sales spend / new customers acquired

Customer acquisition cost (CAC) is the average cost of turning someone into a paying customer for the first time. It usually includes all ad spend plus the other costs of winning customers, such as creator fees, agency fees and marketing tools.

CAC differs from CPA in two ways. It counts only new customers, not repeat buyers, and it covers every channel and acquisition cost, not one campaign's ad spend.

Growth is only healthy when a customer is worth more than they cost. Compare CAC with customer lifetime value: if a customer brings 90 euros of gross profit over time and costs 30 euros to win, you can afford to grow. If they cost 100 euros, every new customer loses money.

  • Improve creatives and landing pages so each euro of ads brings more first orders.
  • Grow cheaper channels, such as email sign-ups, referrals and organic social.
  • Sell products whose margins can absorb the cost of paid traffic.

Common mistakes: dividing total spend by all customers, which mixes repeat buyers in and makes CAC look lower than it is, and leaving out acquisition costs that aren't ad spend.