CAC

CAC, or Customer Acquisition Cost, is the full cost of winning one new customer. You are running ads, money is going out, and new customers are coming in. CAC is the single number that tells you what each of those new customers actually cost you to bring in the door.

The formula is simple. You take the money you spent to acquire customers and you divide it by the number of new customers you won in that same period. That gives you the average price you paid for one customer.

Say you spent 50,000 rupees on a campaign and it brought in 25 new customers. Divide 50,000 by 25 and your CAC is 2,000 rupees. That is what one new customer cost you. Put your own spend and your own new customer count into the box below and read your number off it.

Now for the part that matters. CAC on its own tells you almost nothing. It only means something next to what a customer is worth to you over their lifetime, your LTV. If a customer brings you 6,000 rupees in profit and your CAC is 2,000, you are winning on every customer you buy. If that same customer is only worth 1,500 to you and your CAC is 2,000, you are paying 500 rupees to lose each one, and scaling that spend just loses money faster.

Here is the catch. The number you just worked out only used your ad spend, and the true cost of a customer is bigger than that. Agency fees, the tools you pay for, the discount or free offer you handed out to close the sale, all of that is really part of what you paid to acquire that person. So treat the simple CAC on this page as the floor, the least a customer cost you, not the full number. The real one is always higher.

One more thing worth holding onto. A falling CAC is not automatically good news and a rising one is not automatically bad. If you push into a colder audience to grow, your CAC often climbs, and that can still be the right call as long as it stays under what a customer is worth.

CAC is not a target to beat on its own, it is a price you check against what a customer is worth.