{"id":90474,"date":"2026-07-27T16:15:34","date_gmt":"2026-07-27T16:15:34","guid":{"rendered":"https:\/\/mailrelay.com\/glossary\/customer-acquisition-cost-cac\/"},"modified":"2026-07-27T16:41:28","modified_gmt":"2026-07-27T16:41:28","slug":"customer-acquisition-cost-cac","status":"publish","type":"glossary","link":"https:\/\/mailrelay.com\/en\/glossary\/customer-acquisition-cost-cac\/","title":{"rendered":"Customer Acquisition Cost (CAC)"},"content":{"rendered":"\n

The Customer Acquisition Cost (CAC) is a marketing metric that shows how much money a company invests to gain a new customer. <\/strong><\/p>\n\n

In other words, CAC reflects the average spend needed to turn a potential lead into an actual customer. <\/p>\n\n

It is calculated by taking all the marketing and sales costs involved in acquisition campaigns over a given period and dividing them by the number of new customers gained in that period.<\/p>\n\n

For example, if in one month you invest \u20ac10,000 in marketing activities (online advertising, events, email marketing<\/a>, etc.) and you gain 200 new customers, that month’s CAC would be \u20ac50 per customer. <\/strong><\/p>\n\n

This figure means that, on average, each new customer cost you \u20ac50 in marketing and sales efforts.<\/p>\n\n

CAC is usually expressed in currency (euros, dollars, etc.) per customer and is essential to understanding how efficient your acquisition strategies are.<\/p>\n\n

A high CAC means you are spending a lot to win each customer<\/strong>, while a low CAC suggests that your marketing tactics are more profitable or that you are acquiring customers more cheaply.<\/p>\n\n

Why is it important to measure CAC?<\/h2>\n\n

In marketing it is often said that winning a new customer costs far more than retaining an existing one. <\/p>\n\n

Various studies have pointed out that acquiring a customer can be up to 5, 7 or even more times more expensive than getting a current one to buy again<\/strong>. <\/p>\n\n

That is why knowing and optimizing your CAC is vital for the health of your business, for several reasons:<\/p>\n\n

Budget control: <\/h3>\n\n

Measuring CAC helps you know whether the money you invest in marketing and sales is paying off. <\/p>\n\n

If you acquire customers at a lower cost than expected, you are optimizing your budget. <\/p>\n\n

On the other hand, if your CAC is too high, you could be overspending<\/strong> to attract customers, which is not sustainable in the long run.<\/p>\n\n

Business profitability: <\/h3>\n\n

CAC is directly related to profitability. <\/p>\n\n

For a business to be profitable, the cost of acquiring a customer must be lower than the revenue or value that customer will bring<\/strong> (also known as Lifetime Value or customer lifetime value). <\/p>\n\n

If your CAC is higher than the profit a customer leaves behind, the company will lose money on every new sale. <\/p>\n\n

So keeping a low CAC compared with the average value of each customer is key to healthy growth.<\/p>\n\n

Evaluating strategies and channels: <\/h3>\n\n

CAC lets you compare which channels or campaigns are the most effective. <\/p>\n\n

For example, you might discover that email marketing campaigns<\/a> bring in customers at a much lower cost than social media advertising. <\/p>\n\n

Thanks to this metric, you can identify the most efficient acquisition strategies and focus your resources on them.<\/p>\n\n

Informed decision-making: <\/h3>\n\n

A well-calculated CAC works as a compass for business decisions. <\/p>\n\n

For example, it can help you work out how much you can invest in a campaign to acquire X number of customers without hurting profitability. <\/p>\n\n

Investors also tend to look closely at this metric; a reasonable CAC shows that the company knows how to acquire customers efficiently, which builds confidence.<\/p>\n\n

In short, measuring CAC gives you a clear picture of how expensive (or cheap) each new customer is for your business. <\/p>\n\n

This lets you adjust tactics<\/strong>, optimize how you use your resources and make sure your marketing strategies are aligned with your financial goals.<\/p>\n\n

How is CAC calculated?<\/h2>\n\n

Calculating the Customer Acquisition Cost is relatively straightforward. The basic formula is:<\/p>\n\n

CAC = (Total marketing investment + Sales investment) \/ Number of new customers gained<\/strong><\/p>\n\n

You need to add up every expense related to customer acquisition in a specific period (for example, a month or a quarter) and divide that total by the number of new customers acquired in the same time frame. <\/p>\n\n

It is important that both the expenses and the number of customers refer to the same period for the figure to make sense.<\/p>\n\n

Items to include in the calculation:<\/strong><\/p>\n\n

Marketing expenses: <\/h3>\n\n

This covers the cost of advertising campaigns (Google Ads<\/a>, Facebook Ads, etc.), content creation, email marketing, promotional events, marketing tools or agencies, and discounts or promotions to attract customers, among others.<\/p>\n\n

Sales expenses: <\/h3>\n\n

Salaries or commissions for the sales team, subscriptions to sales software (a C<\/a>R<\/a>M<\/a>, for example) and any other cost tied to the process of turning leads into customers.<\/p>\n\n

Other associated costs: <\/h3>\n\n

Sometimes support costs during the sales process or product demos are included too, depending on the type of business.<\/p>\n\n

A practical example: <\/h3>\n\n

Imagine a startup that in the last quarter spent \u20ac5,000 on online advertising, \u20ac2,000 on content marketing and emailing, and \u20ac3,000 on the salary of the sales team dedicated to new customers. <\/p>\n\n

In that quarter they gained 100 new customers. <\/p>\n\n

Adding up the expenses (5,000 + 2,000 + 3,000 = \u20ac10,000) and dividing them by 100 customers, we get a CAC = \u20ac100 per customer for that quarter.<\/p>\n\n

This calculation gives you a clear figure. <\/strong><\/p>\n\n

With that number in hand, you can ask yourself: is \u20ac100 per customer an acceptable cost for our business? <\/p>\n\n

The answer will depend on how much money each customer you acquire spends or generates on average<\/strong>. <\/p>\n\n

If each customer brings in revenue well above \u20ac100, your CAC may be within an acceptable range; if instead each customer generates less than that, then that CAC is a problem and you will have to work on reducing it.<\/p>\n\n

What is a \u201cgood\u201d or acceptable CAC?<\/h2>\n\n

There is no universal CAC value that is ideal for every company, since it depends on the industry, the business model and the average value of your customers. <\/p>\n\n

However, a common way to assess whether your CAC is acceptable is to compare it with the Customer Lifetime Value (LTV<\/a>)<\/strong>.<\/p>\n\n

CAC vs LTV ratio: <\/h3>\n\n

Broadly speaking, you want your CAC to be significantly lower than your LTV. <\/p>\n\n

For example, many companies aim for every euro invested in acquiring a customer (CAC) to generate at least 3 euros of revenue over that customer’s lifetime (LTV). <\/p>\n\n

This 3:1 ratio (LTV:CAC) is often cited as a healthy benchmark. <\/strong><\/p>\n\n

If you find that your CAC is almost as high as the revenue each customer brings in, you will run into profitability problems.<\/p>\n\n

CAC payback: <\/h3>\n\n

Another way to look at it is to work out how long it takes you to recover the investment made to acquire that customer. <\/p>\n\n

If your CAC is \u20ac100 and on average you earn \u20ac50 per month per customer, you recover the acquisition cost in two months. <\/strong><\/p>\n\n

The faster you recover your CAC, the better for your cash flow and for the viability of your marketing strategy.<\/p>\n\n

It is also useful to compare your CAC with industry benchmarks or with your competitors, if that data is available. <\/p>\n\n

For example, in sectors such as B2B<\/a> software it is normal to have higher CACs, since the sales process is long and each customer won usually generates very high revenue. <\/p>\n\n

In ecommerce selling low-priced products, on the other hand, a high CAC can be a warning sign because the margins per customer are lower.<\/p>\n\n

Ultimately, a \u201cgood\u201d CAC is one that lets your business be profitable and sustainable. <\/strong><\/p>\n\n

If it is too high relative to the value the customer brings, you will need to review your marketing strategies and optimize your processes to bring it down.<\/p>\n\n

Strategies to reduce CAC<\/h2>\n\n

Lowering your Customer Acquisition Cost is a key goal, since it means attracting customers more efficiently. <\/p>\n\n

Some effective strategies to reduce CAC are:<\/p>\n\n

Optimize your segmentation: <\/h3>\n\n

Instead of targeting a very broad audience, focus your campaigns on your buyer personas or on the market segments most likely to need your product.<\/strong> <\/p>\n\n

Precise segmentation means you spend less reaching people who will never convert, and more on those who really could become customers.<\/p>\n\n

Improve your sales funnel: <\/h3>\n\n

Review every stage of your conversion funnel (from the moment someone discovers your brand until they buy) and spot where you might be losing leads. <\/p>\n\n

For example, if many people land on your website but few subscribe to your newsletter<\/a> or request a demo (top of the funnel), you may need to optimize your signup page with a clearer call to action or some incentive (such as a downloadable lead magnet). <\/p>\n\n

The smoother and more effective the customer’s journey through the funnel<\/strong>, the less you will spend pushing them towards conversion.<\/p>\n\n

Make the most of email marketing and automation: <\/h3>\n\n

Staying in touch with your leads through well-designed email marketing campaigns can increase conversions without incurring large additional costs. <\/p>\n\n

Email is a highly profitable channel (with an extremely low cost per message)<\/strong> that lets you nurture prospects with useful content, offers and reminders. <\/p>\n\n

With marketing automation, you can send personalized emails at exactly the right moment (welcome sequences, abandoned cart emails, and so on), increasing your chances of turning leads into customers at minimal cost.<\/p>\n\n

Quality content and SEO: <\/h3>\n\n

Investing in content marketing (blog articles, guides, videos, infographics) helps you attract organic traffic to your website. <\/p>\n\n

If your content answers your audience’s questions or needs, you will gain visibility in search engines.<\/strong> <\/p>\n\n

In the long run, SEO and content can bring in \u201cfree\u201d leads (or at a very low cost compared with paid advertising). <\/p>\n\n

Although creating quality content has an upfront cost, its benefits compound over time and can reduce your dependence on paid ads to generate sales.<\/p>\n\n

Encourage referrals and build loyalty: <\/h3>\n\n

A satisfied customer can bring you new customers at almost no cost. Set up referral programs or incentives so your current customers recommend your brand. <\/p>\n\n

For example, offer discounts or credits for every friend they bring in as a customer. <\/strong><\/p>\n\n

These referrals usually have an extremely low CAC<\/strong>, since your customer is essentially doing the marketing work for you. <\/p>\n\n

Also focus on loyalty<\/strong>: if your customers stay with you longer or buy repeatedly, the extra revenue they generate balances out the initial acquisition cost, improving overall profitability.<\/p>\n\n

Optimize your paid advertising: <\/h3>\n\n

If you run online ads, work on improving the quality and relevance of those ads. <\/strong><\/p>\n\n

More relevant ads tend to cost less per click (in Google Ads, for example, a high Quality Score lowers your CPC). <\/p>\n\n

Also run A\/B tests on your creatives and copy to increase the rate at which those clicks convert into customers. <\/p>\n\n

If you manage to convert more leads into customers with the same advertising budget, your CAC will drop automatically.<\/p>\n\n

Every business is different, so it is worth experimenting and measuring what works best in your case. <\/strong><\/p>\n\n

Review your metrics constantly, try new approaches and adjust accordingly. <\/p>\n\n

Reducing CAC does not usually happen overnight, but with continuous improvements you can make every euro invested go further in the form of new customers.<\/p>\n\n

Conclusion<\/h2>\n\n

The Customer Acquisition Cost (CAC) is a key indicator for understanding how effective your marketing and sales efforts are. <\/p>\n\n

Knowing how much it costs you to win each new customer will give you the guidance you need to adjust your strategies and make them more efficient. <\/p>\n\n

A CAC that is under control and paired with a solid customer value (LTV) means your business can grow profitably.<\/strong><\/p>\n\n

In the competitive world of digital marketing \u2014where advertising, content and email marketing strategies all coexist\u2014, the companies that master their metrics have the edge. <\/p>\n\n

So analyze your CAC regularly, compare it with the value each customer brings you and apply tactics to optimize it. <\/p>\n\n

That way you will boost your growth by spending intelligently and securing the highest possible return on every customer you gain.<\/p>\n","protected":false},"template":"","class_list":["post-90474","glossary","type-glossary","status-publish","hentry"],"yoast_head":"\nCustomer Acquisition Cost (CAC) - Mailrelay<\/title>\n<meta name=\"description\" content=\"The Customer Acquisition Cost (CAC) is a marketing metric that shows how much money a company invests to gain a new customer\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mailrelay.com\/en\/glossary\/customer-acquisition-cost-cac\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Customer Acquisition Cost (CAC) - Mailrelay\" \/>\n<meta property=\"og:description\" content=\"The Customer Acquisition Cost (CAC) is a marketing metric that shows how much money a company invests to gain a new customer\" \/>\n<meta property=\"og:url\" content=\"https:\/\/mailrelay.com\/en\/glossary\/customer-acquisition-cost-cac\/\" \/>\n<meta property=\"og:site_name\" content=\"Mailrelay\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Mailrelay\/\" \/>\n<meta property=\"article:modified_time\" content=\"2026-07-27T16:41:28+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@mailrelay\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"9 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/mailrelay.com\\\/en\\\/glossary\\\/customer-acquisition-cost-cac\\\/\",\"url\":\"https:\\\/\\\/mailrelay.com\\\/en\\\/glossary\\\/customer-acquisition-cost-cac\\\/\",\"name\":\"Customer Acquisition Cost (CAC) - 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