CAC

The average cost of acquiring new customers

CAC = Total Ad Spend / Number of New Orders

Customer Acquisition Cost (CAC) represents the average amount that it costs you to acquire a new customer. This is a critical metric for your e-commerce business, as you always want to drive down CAC compared to the lifetime value (LTV) of your customers.

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CAC (Order) vs CAC (Sign-up)

  • For CAC (Order), "New Customer," is defined by the date that the customer places their first order.

  • For CAC (Sign-up), "New Customer," is defined by the date that the customer first signed up and created an account. Instead of dividing by New Orders, you divide by New Sign-ups.