What is customer acuisition cost?

Customer acquisition cost (CAC) is the costs to acquire a new customer.

It can be as simple as measuring the cost of your campaign efforts in relation to new customers, or can be as complex as accounting for resources, payroll, marketing activities and campaign financial costs.

CAC (customer acquisition cost) used in tandem with LTV (lifetime value) is used to gauge value generated by new customer.

CAC is a great way to measure viability of your business. A CAC that is higher than an LTV means your business is loosing money.