CAC (Customer Acquisition Cost)

Total marketing cost to acquire a customer.

CAC is a broader version of CPA that includes all marketing costs (paid ads, content, affiliate, influencer payouts, team salary attribution), divided by new customers. CPA is platform-specific; CAC is business-wide.

The CAC-to-LTV ratio is the most important growth metric: a healthy business targets LTV ≥ 3× CAC. If you spend 100 MAD to acquire a customer worth 200 MAD lifetime, you can grow but not very fast. At 100 → 600 MAD you can pour fuel on the fire.

Related terms

LTV (Lifetime Value)

Total revenue a customer generates over their lifetime.

ROAS (Return On Ad Spend)

Revenue generated per dollar of ad spend.

CPA (Cost Per Acquisition)

Average cost to acquire one paying customer.