Customer acquisition cost

How it is used

Used in growth meetings, investor decks and unit economics. CAC is usually compared with lifetime value (LTV) to see whether growth is healthy. You calculate, track, lower or break down CAC by channel.

Example sentences

1. Our customer acquisition cost doubled when we moved from referrals to paid ads.

2. Investors asked us to break down customer acquisition cost by channel.

Common collocations

• lower customer acquisition cost
• blended CAC
• CAC payback period
• LTV to CAC ratio

Related terms

• lifetime valueThe total revenue or profit a company expects to earn from one customer during the whole time that customer keeps buying, often shortened to LTV.
• unit economicsThe revenue and costs connected to one unit of the business, such as one customer or one order, which show whether each sale makes or loses money.
• growth hackingFast, low-cost experiments across marketing, product and data to find creative ways of getting more users and customers.
• go-to-market strategyA plan for how a company will bring a product to customers: who it will target first, how it will reach them, how it will sell and at what price.

This word in other fields

The same English word can have a different meaning in another field:

• customer acquisition cost · Marketing

More terms: Unit Economics & Metrics

• revenue
• burn rate
• runway
• gross margin
• break even
• MRR
• cash flow
• profitable
• KPI