Definition
CAC (Customer acquisition cost)
CAC is the cost to acquire a customer (or lead), typically calculated as total acquisition spend ÷ number of customers acquired.
What it means
CAC is the profitability metric most teams live and die by. In paid social, CAC is impacted by CPM (delivery cost), CTR (attention), CVR (conversion), and AOV/LTV (value). Creative quality is often the highest-leverage driver because it can improve both CTR and CVR.
Why it matters
- CAC determines whether you can scale spend profitably.
- It’s the metric investors and operators use to judge growth efficiency.
How to improve it
- Increase conversion rate through better message match and trust.
- Test more angles/hooks to find lower-CAC audiences and offers.
- Increase AOV/LTV (bundles, upsells, retention) so you can afford CAC.
Common mistakes
- Optimizing for CTR while CVR collapses (cheap clicks).
- Ignoring LTV when judging “good” CAC.
Related terms
Apply this with free tools
Use August Ads tools to generate better hooks and scripts, then test variants: