Direct Answer
Customer acquisition cost (CAC) is the total marketing and sales spend required to acquire one new customer over a defined period (typically a month or quarter). Calculate as (marketing + sales spend) / new customers. Track blended CAC across all channels and per-channel CAC by source. Healthy CAC is one-third of LTV or less.
Voice answer (≤30 words)
“Customer acquisition cost is total marketing and sales spend divided by new customers. Healthy CAC is one third of lifetime value or less.”
Per-channel CAC tells you where to scale and where to cut. Blended CAC alone hides high-CAC channels behind low-CAC ones.
Track CAC payback period — months until LTV exceeds CAC. Under 12 months is excellent for service businesses.