Customer Acquisition Cost: The full picture
CAC shows you what a new customer really costs – and whether your marketing is worthwhile.
Customer Acquisition Cost (CAC) is one of the most honest metrics in e-commerce. It forces you to consider all costs of customer acquisition – not just advertising budget, but also personnel costs, tools and agency fees.
The complete CAC calculation
Many companies underestimate their CAC because they only look at direct advertising costs. For a realistic calculation, you must include all acquisition-relevant costs:
- Ad budget: Google Ads, Meta Ads, TikTok, Display, etc.
- Content production: Texts, images, videos for marketing
- Marketing team: Proportional personnel costs
- Tools & software: CRM, tracking, analytics, etc.
- Agency costs: If you use external service providers
Calculate CAC separately for Paid and Organic. Organic CAC (SEO, content) is often lower but takes longer to build.
Analyze CAC by channel
Average CAC across all channels is just the beginning. The real insights come from channel-specific analysis:
- 1 Paid Search: Often higher CAC, but high purchase intent
- 2 Social Ads: Lower CAC possible, but often more touchpoints needed
- 3 SEO/Organic: Lowest CAC long-term, but high initial investments
- 4 Referral: Often the lowest CAC with highest quality
CAC development over time
In growing markets, CAC tends to increase as more competitors bid for the same customers. At the same time, successful brands can lower their CAC through brand awareness and word-of-mouth. Monitor your CAC development monthly.
Important: Always compare CAC with Customer Lifetime Value. High CAC can be worthwhile if CLV is correspondingly high. The metric alone says little – only the CLV:CAC ratio shows the health of your business model.