CAC

CAC (Customer Acquisition Cost) is the total cost of winning one customer — not just media spend but also salaries, tools and creative, divided by the number of new customers.

Why it matters

CAC only makes sense against LTV (customer value). A healthy LTV:CAC ratio is around 3:1 — below that, the business doesn't scale healthily.

Real-world example

A startup pays $80 to acquire a customer, but that customer spends $320 over the relationship. A 4:1 ratio leaves room to invest in growth.