Revenue Economics · Last reviewed August 6, 2026
What is Customer Acquisition Cost (CAC)?
Customer acquisition cost, or CAC, is the average sales and marketing cost required to acquire a new customer during a defined period. A fully loaded CAC may include media, programs, salaries, commissions, agencies, tools, and allocated overhead; companies should state exactly which costs and customers are included.
Why does Customer Acquisition Cost matter?
CAC shows whether the company can acquire growth economically and helps leaders compare channels, segments, and GTM motions.
How do you calculate Customer Acquisition Cost (CAC)?
Formula: total acquisition-related sales and marketing costs divided by new customers acquired in the same period. Align cost timing with the acquisition cycle.
CAC formula and worked example
- Formula: acquisition-related sales and marketing costs ÷ new customers acquired.
- Example: $600,000 in acquisition costs ÷ 30 new customers = $20,000 CAC.
- State whether the numerator includes salaries, commissions, media, agencies, technology, and overhead. Align the cost window to the sales cycle.
Related terms
- CAC Payback Period
- LTV-to-CAC Ratio
- Marketing Efficiency Ratio
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Use the Duet ROI CalculatorBy Duet Editorial Team · Last reviewed August 6, 2026