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Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) measures how much a business spends to acquire one new customer, including marketing, sales, and sometimes onboarding expenses. It’s commonly used in subscription and eCommerce models to understand profitability and budgeting needs. If a brand spends $10,000 on campaigns and gains 200 customers, the CAC is $50. Healthy CAC ensures the business isn't overspending just to drive sign-ups or purchases.
Teams track CAC alongside Customer Lifetime Value (LTV) to see whether growth efforts are sustainable. CAC influences how aggressively teams bid on ads, optimize funnels, and prioritize growth channels. Companies often run experiments across landing pages, onboarding flows, and ad messages to bring CAC down while preserving conversion quality.
Explore more Glossary terms
Customer Journey Mapping
Customer Journey Mapping visualizes how customers move through stages like awareness, consideration, purchase, onboarding, and loyalty.
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Customer Journey Management
Customer Journey Management focuses on designing, monitoring, and improving the end-to-end experience users have with a brand across channels.
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Customer Data Platform
A Customer Data Platform (CDP) unifies data from multiple touch-points, such as websites, apps, CRM systems, and support tools into a single, persistent customer profile.
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Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) measures how much a business spends to acquire one new customer, including marketing, sales, and sometimes onboarding expenses.
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Custom Conversion
A custom conversion is a user-defined goal in analytics or advertising platforms used to measure specific actions that matter to a business.
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CUPED
CUPED (Controlled Pre-Experiment Data) is a statistical technique used in experimentation to reduce variance and improve test sensitivity.
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