CAC

CAC is total sales and marketing spend (ads, salaries, tools, content) divided by the number of new customers acquired in that period. The most common mistake is counting only ad spend and ignoring the people and tools that make acquisition work — a "fully-loaded" CAC includes everything. CAC should be tracked separately by channel, since blended CAC can hide a wildly unprofitable channel subsidised by a cheap one.

• —CAC only means something next to LTV — the LTV:CAC ratio is the real health check on your acquisition spend.
• —Channel-level CAC (referral vs. paid ads vs. outbound) often varies by 10x or more within the same business.
• —Rising CAC over time, without rising LTV, is an early warning that an acquisition channel is becoming saturated.

This is the exact lesson that covers this term in depth — with examples, diagrams, and a hands-on exercise.