Customer Acquisition Cost (CAC)

Intermediate 📣 Marketing / Advertising

Definition

The amount of money you must spend to acquire a single customer, a number that usually makes your CFO weep.

Example Usage

Our CAC is $150, which means we're only profitable if customers spend more than that—a bet we're losing.

Origin

SaaS and startup metrics, formalized in the 2010s

Fun Fact

If your CAC is too high relative to customer lifetime value, you're essentially paying people to take your product.

Source: SaaS Metrics and KPI Standards

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