Customer Acquisition Cost (CAC) is a key financial metric used in almost all industries to evaluate the efficiency of marketing and sales activities. CAC refers to the total cost incurred by a company to acquire a new customer. This metric is particularly important for start-ups and growth-orientated companies, but can also be important for established companies to assess the profitability of their customer base.

The CAC is usually calculated by totalling all costs associated with customer acquisition (including marketing and sales costs) and dividing this total by the number of new customers acquired in the same period.​

CAC is often used as a starting point for analysing profitability and is frequently considered in conjunction with other key figures such as customer lifetime value (CLV). A favourable ratio of CLV to CAC indicates that a company is operating efficiently and could be profitable in the long term. However, if the ratio is unfavourable, this could indicate an inefficient use of resources or an unsustainable business model.

The level of CAC can vary depending on the industry, business model and market conditions. In digital business models, especially for software-as-a-service (SaaS) companies, a low CAC is particularly desirable as they often aim for rapid growth. In capital-intensive industries such as the automotive or property sectors, however, CAC can naturally be higher.

Carefully analysing the CAC enables companies to assess the ROI of their marketing campaigns, allocate budgets more efficiently and develop long-term strategies for growth and profitability.