The total investment needed to convince a new customer to buy your product or service.
CAC is calculated by dividing all acquisition-related costs (ad spend, marketing/sales team salaries, tools) by the number of new customers acquired over a given period.
It is the compass of a startup's economic viability. If your CAC is higher than the value generated by the customer (LTV), your model is not profitable. The goal is often to maintain an LTV:CAC ratio greater than 3.
"We never look at advertising CAC in isolation. A Facebook CAC might seem profitable, but if adding salaries and tools ruins it, growth flatlines. We build full-funnel strategies to lower the 'Blended CAC' (the company's overall CAC)."
Let's conduct an audit of your metrics together to identify your true growth levers.
