CAC

Formula

Spend / new customers (paid = paid-only; nCAC = first-time only)

Unit

$

Models

All models

What it is

Customer Acquisition Cost (CAC) is total acquisition spend divided by the number of new customers acquired in the same period. Paid CAC uses paid channel spend only; nCAC (new-customer CAC) counts only first-time buyers, excluding reactivations. The denominator definition must always be explicit.

How to calculate it

Sum all acquisition spend (paid media, agency fees, creative, promotions) for the period, then divide by new customers acquired in that period. For a paid-only view, exclude organic and referral-attributed customers from the denominator. For nCAC, also exclude any returning or reactivated customers.

Why it matters

CAC is the input side of the payback and LTV:CAC equations that govern whether a growth model is economically sustainable. At the acquisition funnel stage it tells you how efficiently each channel converts spend into customers — before any retention economics come into play. Comparing CAC across verticals without adjusting for average order value or LTV is misleading.

Benchmarks & pitfalls

DTC vertical medians from Eightx and a16z (2025): pet ~$23, fashion ~$37, beauty ~$42, food ~$51, fitness ~$67, supplements ~$89. There is no universal "good" CAC — the right number depends entirely on gross margin and customer LTV in that vertical. Loaded CAC (fully burdened with overhead) versus channel-only CAC can differ by 30–50%, so always clarify the cost scope before benchmarking. Blended CAC that mixes paid and organic new customers will understate true paid acquisition cost.