What is CAC (Customer Acquisition Cost)?
The average cost of acquiring a new customer, including marketing and sales expenses.
Why It Matters
Knowing your CAC helps you determine whether your growth strategy is financially sustainable.
Real-World Example
If you spend $10,000 on marketing and gain 100 new customers, your CAC is $100.
“Understanding terms like CAC (Customer Acquisition Cost) matters because it helps you have better conversations with developers and make smarter decisions about your software. You do not need to be technical. You just need to know enough to ask the right questions.”
Related Terms
LTV (Lifetime Value)
The total revenue you can expect from a single customer over the entire time they remain a customer.
Conversion Rate
The percentage of visitors who take a desired action, like signing up or making a purchase.
MRR (Monthly Recurring Revenue)
The predictable revenue your business earns each month from active subscriptions.
From definition to deployment
Knowing the term is step one. Using it in something real is the rest.