GLOSSARY

Customer acquisition cost.

CAC measures acquisition spending for each new customer gained.

Why it matters

Define which costs you include and use new customers, rather than all orders, as the denominator. Compare the result with contribution and the time needed to recover the cost.

CAC = acquisition expenditure ÷ new customers

Put it in context

Use this concept alongside the relevant customer journey, business costs and measurement assumptions. A single metric rarely tells the whole story.

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