CAC (Customer Acquisition Cost)

CAC is the average total cost — advertising, tooling, salaries, everything spent to acquire customers — divided by the number of new customers acquired in a given period. It's a core efficiency metric for any business running paid growth, and it's most useful when compared against how much a customer is actually worth over their lifetime.

A low CAC sounds good in isolation, but it only means something relative to customer value — which is why CAC is almost always discussed alongside LTV:CAC ratio rather than as a standalone number. Several agencies reviewed on this site (like Directive Consulting) build their entire reporting methodology around connecting marketing spend to CAC and downstream revenue, not just lead volume.

Discussed directly in our Directive Consulting review, and implicitly throughout our AI PPC Agencies and AI Analytics & Attribution categories.