How do you calculate CAC?

CAC = marketing spend ÷ new customers acquired. For example: ₹3 lakh of spend that brings in 600 first-time customers is a CAC of ₹500.

What Is CAC? Definition, Formula and Example

What is CAC (customer acquisition cost)?

CAC is what it costs, on average, to win one new customer: marketing spend divided by the number of new customers acquired in the same period.

FormulaCAC = marketing spend ÷ new customers acquired

CAC is not the same as CPA. CPA counts every purchase, including repeat buyers; CAC counts only first-time customers. A brand with many returning buyers can have a low CPA and a high CAC.

CAC means little on its own. It is read against what a customer is worth over time, which is why it usually appears as the LTV:CAC ratio.

Example

₹3 lakh of spend that brings in 600 first-time customers is a CAC of ₹500.

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