CAC (Customer Acquisition Cost)

The average cost to acquire one new customer.

CAC divides total sales and marketing spend by the number of new customers gained in a period. It reveals go-to-market efficiency and, combined with LTV, shows whether growth is sustainable. Investors scrutinise CAC and its payback period.

Examples

£10k spend acquiring 100 customers gives a £100 CAC. — A startup lowers CAC by improving conversion rates.

How it relates to The Startup Foundry

Efficient acquisition supports the Scalability pillar. The Foundry’s modules help you sharpen unit economics before pitching.

Related terms

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