SYS/DEF
CAC
Customer acquisition cost: what you pay, on average, for a won customer — not a click, not a lead.
Definition
CAC is acquisition spend divided by the number of customers won in the same period. Spend should include media, tools, and an honest slice of human time; the denominator should be customers, not MQLs. A €80 CAC with a €240 LTV and a 4-month payback is not the same business as an €80 CAC paid once on a product with €30 of margin.
CPA and CAC get confused in meetings. CPA is a cost per campaign conversion; CAC is a cost per customer in the firm’s economics. A lead is not a customer.
When it matters
You compute it to decide whether a channel scales, to set a bid cap, and to read the LTV:CAC ratio. In experimentation, a conversion lift that does not improve CAC (because added traffic is dearer, or less qualified) is not a business win.
Payback — months until margin repays CAC — stops you celebrating a comfortable LTV:CAC ratio financed on too-long credit.
Pitfalls
Leaving growth salaries out of the numerator. Counting “free” SEO customers in a paid CAC denominator. Comparing a cash-out M0 CAC to a 36-month undiscounted LTV. Changing the attribution window and declaring that CAC fell.
Related terms
Related tool
Ratio and months to payback, distinct from A/B maths: Open LTV:CAC and payback.