Customer Acquisition Cost
Also: CAC
The total sales and marketing cost to acquire one new customer, the price you pay to win each account.
Why it matters
CAC is the foundation of marketing economics: if you do not know what a customer costs to acquire, you cannot know whether growth is profitable. It anchors decisions about channels, pricing, and how hard to spend. Paired with lifetime value, it tells you whether the business model works.
How it is calculated
CAC = total sales and marketing spend in a period / number of new customers acquired in that period
What good looks like
There is no universal target, CAC only makes sense relative to what a customer is worth (see LTV:CAC) and how fast it pays back. The same CAC can be excellent for a high-value contract and ruinous for a low one.
In the European market
CAC in Europe is shaped by fragmentation: smaller per-country markets, multiple languages, and localisation costs can push acquisition costs above a comparable US motion, and they vary sharply by market. A blended European CAC hides the reality that one country may be efficient while another is not yet at scale. Measure CAC per market as you enter, and expect early-market CAC to be high until you build local presence and references.
Related terms
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