CAC (Customer Acquisition Cost)
How much it costs, on average, to win a new customer — the sum of marketing and sales spending divided by the number of customers acquired in the period.
Also known as: cac · customer acquisition cost · what is cac · acquisition cost · cac marketing
Try CRPRO free for 7 daysCAC stands for Customer Acquisition Cost: how much the business spends, on average, to win one new customer.
⚠️ Do not confuse it with the Brazilian e-CAC. The e-CAC is the Federal Revenue Service's virtual support center — a Brazilian tax-services portal, with no relation to marketing. A large share of Portuguese-language searches for "CAC" have that intent. This entry covers the business metric.
How to calculate it
$$CAC = \frac{marketing + sales\ investment}{new\ customers\ in\ the\ period}$$
What goes into the calculation
- Paid media and agencies.
- Marketing and sales salaries and commissions — the most forgotten item, and usually the largest.
- Marketing and CRM tools.
- Events, content, giveaways.
What does NOT go in
- The cost of serving or retaining someone who already is a customer (that is an operating cost, not an acquisition cost).
- Product or support teams.
- Customers who came from a spontaneous referral should not inflate the denominator of a paid campaign — mixing organic with paid produces a CAC that is useless for deciding anything.
The calculation that actually matters: CAC × LTV
On its own, CAC does not say whether it is high or low. It only makes sense against LTV (Lifetime Value), how much the customer generates while they stay.
- LTV / CAC < 1 — every new customer is a loss.
- LTV / CAC ≈ 3 — the usual benchmark for a healthy recurring-revenue business.
- A very high LTV / CAC — usually means the business is investing too little in acquisition, not that everything is going well.
And there is payback: how many months it takes for the customer to return the CAC. A good LTV with an 18-month payback can still break the cash flow.
Since LTV depends on how long the customer stays, churn and average ticket move the acceptable CAC — reducing churn cheapens acquisition without spending less on media.
Frequently asked questions
What is CAC?
Customer Acquisition Cost: how much the business spends on average to win a new customer, adding up marketing and sales and dividing by customers acquired in the period.
Is CAC the same thing as e-CAC?
No. The e-CAC is the Brazilian Federal Revenue Service's virtual support center, a tax-services portal. The acronym is the same; the subject has no relation.
What goes into calculating CAC?
Paid media, agencies, tools and — the most forgotten item — marketing and sales salaries and commissions. The cost of serving existing customers stays out.
What is the ideal ratio between LTV and CAC?
About 3 to 1 is the usual benchmark in recurring revenue. Below 1, every new customer is a loss; well above it usually signals underinvestment in acquisition, not excellence.
How do I reduce CAC?
By improving conversion at each pipeline stage before cutting media spend, and by reducing churn — a customer who stays longer raises LTV and makes the same CAC acceptable.
Related pages
Related glossary terms
Churn
The percentage of customers or revenue lost in a period — the metric that measures how much of the base slips away while the business tries to grow.
Average ticket
The average amount spent per order or per customer in a period, calculated by dividing revenue by the number of sales.
Lead
A contact who has shown some interest in what the business sells and left a way to be reached — not yet qualified by profile or buying moment.
Sales pipeline
A representation of the stages a contact moves through from first contact to purchase, used to measure where deals stall and to project revenue.
LTV (Lifetime Value)
The total revenue a customer generates while they remain a customer — the metric that defines how much you can spend to acquire them.
ROI (Return on Investment)
An indicator that measures the return of an investment relative to what was spent, expressed as a percentage of the amount invested.