CAC (Customer Acquisition Cost)
Customer Acquisition Cost is the fully-loaded spend required to acquire one paying customer, calculated as total acquisition spend divided by new customers in a period.
CAC is the per-customer cost of the marketing and sales work that produced that customer. Blended CAC includes every dollar spent on acquisition — ads, salary of the acquisition team, tools, agency fees — divided by new customers. Paid CAC isolates just ad spend over new customers attributed to paid channels.
Most operators track paid CAC daily or weekly and blended CAC monthly. Paid CAC is sensitive to bidding changes and can move fast; blended CAC is the real profitability signal.
Healthy CAC is judged against LTV. The LTV:CAC ratio is the guardrail — most DTC brands target 3:1 or better. A 1:1 ratio is unsustainable. Ratios of 5:1+ often mean a brand is under-investing and leaving growth on the table.
CAC payback is the time to recoup CAC from gross margin. A 6-month payback is strong for SaaS, 3-month for DTC. Long payback is why aggressive growth brands need patient capital.