Conversion Optimisation
Customer Acquisition Cost (CAC)
Also known as: CAC, Cost per acquisition, Lifetime Value & Customer lifetime value
Definition
Customer glossaryAcquisitionAcquisition is the process of attracting new users or customers to a product, service, or platform.Open glossary term Cost (CAC) is the total cost of acquiring a new customer, including marketing, sales, and related expenses.
In practice
Used to evaluate the glossaryEfficiencyEfficiency measures how quickly and easily users can complete tasks once they are familiar with a system.Open glossary term of glossaryAcquisitionAcquisition is the process of attracting new users or customers to a product, service, or platform.Open glossary term glossaryStrategyStrategy is a high-level plan that defines long-term goals and the approach to achieving them.Open glossary term and compare against LTV.
The reality
If CAC is too high relative to LTV, growth becomes unsustainable.
Also known as
CAC, Cost per acquisition, Lifetime Value & Customer lifetime value
Plain English
How much it costs to get a new customer.
FAQ
Common questions
A few practical answers to the questions that usually come up around this term.
What is customer acquisition cost?
CAC is the total cost of acquiring a new customer.
Why is CAC important?
It shows how efficient your glossaryAcquisitionAcquisition is the process of attracting new users or customers to a product, service, or platform.Open glossary term efforts are.
How do you calculate CAC?
By dividing total glossaryAcquisitionAcquisition is the process of attracting new users or customers to a product, service, or platform.Open glossary term costs by the number of new customers.
How does CAC relate to LTV?
CAC should be lower than LTV for sustainable growth.
Related Services
Related Guides
Related Terms