Business & Growth

    Customer acquisition cost (CAC)

    The total marketing and sales cost to land one new customer.

    Definition

    Divide monthly marketing spend by new customers acquired. Healthy ratio: LTV ÷ CAC > 3. Below that, you're paying too much to grow.

    Related terms

    Customer lifetime value (LTV)

    Total profit expected from a customer over the entire relationship.

    Lead

    A potential customer who has shown interest but hasn't booked yet.