What is CAC?

CAC definition: CAC is an acronym of Customer Acquisition Cost; it refers to the amount of money needed to acquire a new customer through sales and marketing in a specific time period.

CAC is calculated using a number of factors including that contribute to the cost of marketing, advertising, and eventual sale of a product.

These factors include:

• Marketing spend
• Advertising spend
• Staff salaries
• Staff bonuses
• Content creation costs
• Affiliate commissions

For example:

• LG spend $100,000 on advertising a new Smart TV in Q1.
• They acquired 100 customers
• Their CAC is $1,000

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Popularity of the term CAC

Concept related to CAC

• Advertising budget
• Cost per action
• Cost per mile

Additional resources about CAC

• Customer Acquisition Cost: The Secret Weapon of Successful Startups
• Customer Acquisition Cost: The One Metric That Can Determine Your Company’s Fate
• What is customer acquisition cost and why does it matter?