Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, calculated by dividing your total marketing and sales spend by the number of new customers gained in that period.
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, calculated by dividing your total marketing and sales spend by the number of new customers gained in that period.
CAC = Total Marketing Spend ÷ Number of Customers Acquired CAC measures the price tag on every new customer your store acquires. It includes all marketing spend: paid ads, influencer fees, content creation, SEO tools, and any other costs directly tied to bringing in new buyers. A low CAC means you acquire customers efficiently; a high CAC means growth is expensive. The key is not to minimise CAC in isolation but to optimise the ratio between CAC and LTV to ensure long-term profitability.
CAC = Total Marketing Spend ÷ Number of Customers Acquired You spend £3,000 on Facebook Ads and £1,000 on Google Ads this month, acquiring 200 new customers. Your CAC is (£3,000 + £1,000) ÷ 200 = £20. Each new customer costs you £20 to acquire.
If your CAC exceeds the profit from a customer's first order (or their LTV for subscription models), you lose money on every acquisition. Understanding CAC by channel tells you where to increase spend and where to cut it.
Only counting ad spend as acquisition cost while ignoring creative, tools, and agency fees
Not separating new customer acquisition from returning customer marketing spend
Averaging CAC across all channels instead of calculating it per channel
StoreLyst calculates CAC per channel by connecting your ad platform data to actual customer acquisition. You see exactly what each new customer costs from Google, Meta, and other sources.
Learn more about Google Ads →There is no universal benchmark because CAC depends on your product price and LTV. The rule of thumb is your CAC should be less than one-third of your LTV. For a store with £150 LTV, aim for CAC below £50.
Improve conversion rate on your site, refine ad targeting to reach higher-intent audiences, invest in organic channels like SEO and email, and optimise your landing pages. Retargeting existing visitors is also cheaper than reaching cold audiences.
Blended CAC includes all marketing costs (including SEO, content) divided by all new customers. Paid CAC only includes paid spend divided by customers from paid channels. Track both: blended for overall efficiency, paid for channel-level decisions.
Rising CAC is common as you exhaust easy-to-reach audiences and ad platforms become more competitive. Combat this by diversifying channels, improving organic acquisition, building referral programmes, and continuously testing new creative and targeting.
Stop calculating in spreadsheets. Get real-time cac tracking for your Shopify store.