CAC

CAC, or customer acquisition cost, is the average amount you spend on marketing and sales to win one new customer.

What it means

CAC is what it costs you, on average, to turn a stranger into a paying customer for the first time. You take everything you spent trying to acquire customers over a period — ad spend, agency fees, affiliate payouts, the tools that only exist to bring people in — and divide it by the number of new customers that period produced.

CAC is not your cost per order, because repeat buyers place orders without costing you anything to acquire. It is also not the inverse of ROAS: ROAS measures revenue returned per ad pound inside one platform, while CAC counts every acquisition cost you carry and answers a different question — what one new customer is worth paying for.

How it is measured

Divide total acquisition spend by new customers acquired in the same window. The honest denominator is first-time buyers only. The flattering one is all orders, which quietly includes returning customers you already paid for and can halve the figure. The honest numerator includes agency retainers, creative costs and platform fees, not just media spend. Decide which version you use, write it down, and keep it fixed, because a CAC that improves because you changed the maths tells you nothing.

A Shopify example

  • For A candle store selling a single £32 bestseller

    Worked example

    In March the store spent £4,000 on Meta ads, £600 on an agency retainer and £200 on affiliate commission, so total acquisition spend was £4,800. It recorded 600 orders, but only 400 came from first-time buyers. Using the honest denominator, CAC is £4,800 divided by 400, or £12. Using all 600 orders it would read £8 — the same month, flattered.

See this on your own store

Paste your store URL. The audit takes about a minute, costs nothing, and ends with a welcome flow you can read before anything is sent.