Customer Acquisition Cost captures everything you spend on marketing and sales to win one new customer. It only means something next to lifetime value: a healthy marketplace recovers CAC well within a customer's lifespan. Track CAC by channel and by side of the marketplace, since acquiring a seller and acquiring a buyer often cost very different amounts.
Customer Acquisition Cost (CAC)
The average cost to acquire one new customer.
What it is
Formula
CAC = Total Marketing & Sales Expenses ÷ Number of New Customers Acquired