Ecommerce CAC (Customer Acquisition Cost) is the specific cost associated with acquiring a customer for an online store. It takes into account all sales and marketing expenses, such as paid ads, content marketing, and promotions, divided by the number of customers acquired. For ecommerce businesses, calculating CAC is crucial to ensuring that their ecommerce accounting is up to date and that their customer acquisition strategies are cost-effective and sustainable. A high CAC can lead to profitability issues, while a low CAC means more efficient marketing.
In ecommerce, tracking CAC helps businesses optimize their marketing spend and ensure that they are not overspending to acquire customers. When calculating CAC, ecommerce businesses should also consider the lifetime value of a customer (LTV). If CAC is too high compared to LTV, it could signal that the business is not maximizing its customer base’s potential. By understanding and managing CAC, ecommerce businesses can keep their customer acquisition strategies profitable and sustainable.
Read our in-depth article about ecommerce CAC.
Ecommerce CAC (Customer Acquisition Cost) Formula
CAC = Total Marketing Spend / Number of New Customers Acquired
The customer acquisition cost is calculated by dividing the total marketing spend by the number of new customers acquired.