Customer acquisition cost (CAC)

CAC stands for customer acquisition cost: the marketing spend in a period divided by the number of new customers it brought.

By Berend Vrakking, founder of Product Metrics. Updated 7 October 2026.

Formula

CAC = marketing spend ÷ new customers acquired

Google Ads defines its own CAC metric as the ad spend allocated to new customers divided by the total of unique new customers acquired through a campaign. This entry uses the simple form: all the spend of the period divided by new customers. New customer acquisition cost (nCAC) is the same calculation held strictly to customers who have not bought before.

Example

One month, 75 new customers
Step	Value
Ad spend	€6,000.00
New customers acquired	75
CAC (€6,000.00 ÷ 75)	€80.00
Profit on a first order	€50.00
Left for later orders to recover (€80.00 − €50.00)	€30.00

Each new customer cost €80.00, and their first order paid back €50.00. The other €30.00 is an IOU, payable only if they order again. Illustrative data.

For one product, and for an account

Per product, CAC asks two things: how many of its buyers were new to the shop, and what its ads cost per new buyer. Some products recruit cheaply; others mostly sell to people who already bought. One account CAC stirs the recruiters and the regulars’ favourites into the same number.

Product Metrics shows nCAC, the cost of a new customer, per product and as an average. New customers have their own conversion action in Google Ads, and the average is ad spend divided by new customers.

Common mistake

Dividing ad spend by all orders. That is cost per sale wearing a CAC badge, and every repeat buyer in the count makes new customers look cheaper than they were.

Questions

What does CAC stand for?

In marketing and ecommerce, CAC stands for customer acquisition cost: what it costs to win one new customer. Outside business the same letters can mean other things.

What is the difference between CAC and CPA?

CPA divides ad spend by every conversion, so repeat buyers count. CAC divides spend by new customers only, so it is usually higher. €2,000.00 of spend over 40 sales is a CPA of €50.00, and over 25 new customers a CAC of €80.00.

What is a good CAC?

One the new customer pays back. Set it against the profit on a first order, then against later orders if you know how often customers return. Margin and repeat purchases set that line, so it sits in a different place for every shop.

Sources

Google Ads Help: Measure your lifecycle goals campaigns

Keep reading

Customer acquisition cost for ecommerceThe formula, nCAC and what you can pay for a new customer.
LTV:CAC ratio for ecommerceCompare what a customer brings with what they cost.
Cost per acquisition (CPA)Cost per sale, counting every conversion.
Product SegmentationSee each product in one of six segments, by volume and return.
Repeat purchase rateWhat decides whether a first order pays back.
ROAS, MER, POAS and nCAC: which metric to useWhere new customer acquisition cost fits next to MER and ROAS.