What is customer acquisition cost (cac)?
The total cost of acquiring a new customer, including marketing, sales, and related expenses. The benchmark for efficient growth.
Formula
CAC = Total Acquisition Costs / Number of New Customers
Why it matters
CAC determines whether your growth is sustainable. If CAC > LTV, you're losing money on every customer. Rising CAC is often a sign of channel saturation or poor targeting.
How to improve
Build viral loops to reduce paid reliance. Improve conversion rates to get more from existing spend. Focus on high-intent channels. Use content and SEO for lower-cost acquisition. Test referral programs.
Related playbooks
Give both sides a reward
People hate asking friends for favors. Give both the sharer and the friend something, and sharing feels like a gift instead.
Let users make templates others find
Your users create things. Let them share those things publicly. Each one becomes a page Google can find.
Make your product visible to non-users
Every time someone uses your product, someone who doesn't have it sees it working. That's the best ad you'll ever run.
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