BUSINESS SPEAK · CAC
CAC: Customer acquisition cost
What it costs, on average, to win one new customer.
What it means
CAC is sales and marketing spend ÷ new customers won in the same period. Compare it with the profit each customer brings to see whether growth pays.
Where you’ll meet it
- A healthy business earns back CAC within months, not years.
- Include salaries, commissions and tools — not just ad spend — or CAC looks better than it is.
Worked example
Scenario: You spend 6,000 on ads and 4,000 on sales, and win 50 customers paying 40 a month at a 75% margin.
- CAC: 10,000 ÷ 50 = 200
- Monthly profit per customer: 40 × 75% = 30
- Payback: 200 ÷ 30 ≈ 6.7 months
Answer: Each customer costs 200 and pays that back in about 7 months.