CAC – Customer Acquisition Cost

Definition

CAC (Customer Acquisition Cost) encompasses all marketing and sales costs incurred to acquire a new customer – including ad spend, agency fees, sales team salaries, and tool costs. The CLV:CAC ratio should be at least 3:1.

Formula

Optimization Tips

Optimize the marketing mix and focus on the most efficient channels. Improve conversion rates across the entire funnel. Use referral programs for organic customer acquisition. Increase lead quality to reduce sales effort.