Customer Acquisition Cost (CAC)


Customer Acquisition Cost (CAC) is defined as the cost of converting a lead into a customer.

You can calculate CAC by dividing the total amount spent on sales and marketing in a specific time period by the number of customers acquired during that same period.

Let’s plug in a few numbers to show how this works:

Customer Acquisition Cost (CAC)= Sales and Marketing Costs / Number of New Customers

  • Sales and marketing costs = $1 million
  • New customers = 25,000

Therefore, CAC = $40, or $1 million divided by 25,000.




Book: House of the Customer (2023) by Greg Kihlström