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What is Customer Acquisition Cost? CAC Formula and Analytics Meaning
Customer acquisition cost, usually shortened to CAC, is the average cost to acquire a new customer. It is commonly used by SaaS, ecommerce, subscription, and B2B companies to evaluate growth efficiency.
CAC helps answer whether marketing and sales spend is producing customers at a sustainable cost.
CAC formula
The basic formula is:
CAC = sales and marketing cost / new customers acquired
If a company spends $20,000 on sales and marketing in a month and acquires 100 new customers, CAC is $200.
Some teams calculate blended CAC across all channels. Others calculate paid CAC for paid acquisition only.
Why CAC matters
CAC should be compared with customer lifetime value, payback period, gross margin, and retention. A high CAC can be fine if customers stay long enough and generate enough profit. A low CAC can still be bad if customers churn quickly.
For analytics teams, CAC becomes more useful when campaign costs can be connected to conversion and revenue data.
How analytics helps CAC
Analytics helps identify which channels, campaigns, landing pages, and funnels acquire customers efficiently. UTM codes, goals, revenue analytics, and attribution reports all support better CAC analysis.
Swetrix helps teams connect campaigns, conversions, funnels, and revenue so customer acquisition cost can be evaluated with cleaner first-party data.
Related terms: customer lifetime value, return on investment, conversion rate, and revenue attribution.
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