Short version: CAC, or customer acquisition cost, is the average cost of gaining one new customer.
The basic calculation divides acquisition spend by the number of new customers acquired in the same period. The important detail is what counts as spend. If the calculation includes only media spend, it is closer to ad acquisition cost. A fuller CAC can include campaign production, tools, agency or team time, sales support, and other acquisition costs that helped create the customer.
CAC becomes useful when it is compared with customer value, payback time, margin, and channel quality. A low CAC is not automatically good if it brings poor-fit customers who churn quickly, and a higher CAC may still work when the customer has strong LTV. Teams should also read CAC together with attribution quality, because a single channel can look cheaper or more expensive depending on how credit is assigned.
Related terms: CPA, LTV, and attribution.