CAC
Customer Acquisition Cost
A metric showing how much it costs to acquire a single new customer.
In Simple Terms
CAC refers to the amount of money spent to acquire a single new customer. For example, if a store spent 100,000 yen on ads and 100 new customers came in to buy something, the CAC would be 1,000 yen. It's calculated by taking the total advertising costs (and similar expenses) and dividing that by the number of new customers gained. This makes it a commonly used benchmark for judging whether a company's marketing efforts are working well.
Behind the Name
CAC is short for Customer Acquisition Cost — it combines the words Customer, Acquisition, and Cost into one acronym. It comes in handy when you want to work out how much money you spent to bring in just one new customer.
Take a Closer Look!
CAC is the cost a company spends to acquire one new customer.
It's calculated by dividing the total of expenses spent directly on growing the customer base — mainly things like advertising costs and sales staff's salaries — by the actual number of new customers gained.
Working out this number lets you check whether your marketing activities are running efficiently or not.
For example, if CAC is too high compared to other companies or your own past data, that's a sign you need to reconsider how you're advertising or approaching sales.
Put simply, it's like a report card showing how cheaply you were able to bring in new customers.
It's also important to compare this against the profit those customers are expected to bring the company in the future.
No matter how many new customers you gain, if the cost of acquiring them is higher than what those customers end up spending, you'll end up in the red.
That's why this metric is widely used by companies as important data for evaluating business growth and stability.