Customer acquisition cost (CAC): calculation, benchmarks and levers

In short: CAC measures how much acquiring a new customer costs. It’s one of the most important advertising metrics — but never read alone: it’s compared to customer lifetime value (LTV).

How to calculate CAC

Basic formula:

CAC = (marketing + sales spend) ÷ number of new customers acquired over a period.

Example: €10,000 spent to acquire 100 customers = €100 CAC. Ideally, include all acquisition costs (media, tools, possibly related salaries).

CAC isn’t read alone: the LTV/CAC ratio

A €100 CAC is excellent if a customer brings €600 over their lifetime (LTV), and disastrous if they bring €80. So watch the LTV/CAC ratio: a healthy ratio is often around 3 to 1 (a customer’s value is about three times their acquisition cost), adjusted by sector.

Levers to reduce CAC

• Improve targeting: less wasted spend.
• Optimise conversion (site, funnel, offer): more customers for the same budget.
• Activate free channels: SEO, content, word of mouth, referrals.
• Increase retention: keeping customers costs less than acquiring them.

FAQ

What is a good CAC? There’s no universal value: a good CAC is clearly below the value a customer generates (LTV). The ratio matters more than the raw amount.

CAC and CPA — same thing? Close: CPA (cost per acquisition) often measures the cost of an action (purchase, lead) on a channel; CAC aggregates the cost of acquiring a customer across all channels.

How to improve the LTV/CAC ratio? By lowering CAC (targeting, conversion) and/or raising LTV (retention, upsell, cross-sell).

PubliCité France — blog, Digital advertising. French version: /blog/cout-acquisition-client/