Metrics
CAC
Total cost to acquire one new customer, including ad spend, creative production, agency fees, and marketing tools. Calculated as total marketing spend divided by new customers acquired. Lower CAC means more efficient growth. Must be compared against LTV to ensure profitability: if CAC exceeds LTV, you're losing money on every customer. Benchmarks vary wildly by vertical, AOV, and category — premium categories typically run higher CAC than mass-market.
Why it matters
It is the number that decides whether growth is affordable, and it is routinely understated by excluding costs that are genuinely acquisition costs.
In practice
Decide once whether CAC includes agency fees, tooling and creative production, then never change it mid-year. A CAC that improves because the definition moved is not an improvement.
Related terms