Customer Acquisition Cost (CAC) is the total amount a business spends on marketing and sales to win one new customer, calculated by dividing all acquisition spend over a period by the number of new customers gained in that period.
Also written as CAC.
CAC is the number that tells you whether your marketing is affordable. If it costs more to win a customer than that customer is worth, you are losing money on every sale no matter how good the marketing looks.
For a small business, CAC is the difference between growth that funds itself and growth that drains the bank account. It is the first number to know before you scale any channel.
Comparing CAC across channels shows you where to put the next dollar. A channel with a low CAC deserves more budget; a channel with a high CAC needs fixing or cutting.
Say a plumbing business spends 2,000 dollars in a month: 1,200 on Google Ads, 500 on a part-time marketing contractor, and 300 on its website and tools.
In that month it wins 10 new customers. CAC is 2,000 divided by 10, which is 200 dollars per customer.
If the average new customer is worth 800 dollars in their first year, a CAC of 200 dollars is healthy. If the average customer is worth 150 dollars, the business is losing money to win them, and something has to change.
In-House connects to your ad accounts and analytics so the strategy agent can see CAC by channel, not guess at it, and point the budget at the channels that win customers cheaply.