Measure the cost of acquiring a customer.
Customer acquisition cost divides the cost of acquiring new customers by the number of customers acquired. A useful measure aligns the cost base, the customer definition and the attribution period.
Advertising alone rarely captures the entire acquisition cost. Sales salaries, commissions, software, agencies and allocated overhead may be relevant. In a long sales cycle, spend and customer wins may occur in different periods.
The formula, made clear.
- Acquisition spend
- A consistently defined, fully loaded acquisition cost base.
- New customers
- New paying customers, rather than leads or trial sign-ups.
Put the numbers in context.
$120,000.00 of acquisition spend generates 200 new customers. CAC is $600.00 per customer.
| Input | Example value |
|---|---|
| Acquisition spend | $120,000.00 |
| New customers acquired | 200 customers |
| Cost per acquired customer | $600.00 |
What this calculation assumes
One blended acquisition period. Costs and new customers are assumed to be appropriately matched; no channel or cohort segmentation.
What to consider next.
Compare acquisition cost with gross-profit lifetime value, and investigate payback and retention by cohort.
How we approach financial models →