What is CAC (customer acquisition cost)?
Short answer
CAC is the total cost of winning a new customer: marketing and sales spend divided by the number of new customers in the same period.
If you spent ₹2,00,000 on marketing in a month and gained 400 new customers, your CAC was ₹500.
CAC is most useful when compared with customer lifetime value. If a customer brings much more margin over time than it costs to acquire them, growth is sustainable.
Unpredictable ad costs make CAC unpredictable too. See why ad costs are unpredictable on Meta.