// definition

Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is the total amount you spend on marketing and sales to acquire one new paying customer. You calculate it by dividing total acquisition spend over a period by the number of customers gained in that period. If you spend $1,000 and gain 20 customers, your CAC is $50.

Why it matters for developers

CAC tells you whether your growth is sustainable. Compared against lifetime value (the LTV/CAC ratio), it reveals whether each customer earns back more than they cost — the single most important question in paid growth.