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Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is the total sales and marketing spend required to acquire one new customer, over a given period. You calculate it by dividing total acquisition spend by the number of new customers won in that same period.

Why CAC Matters

CAC = total sales & marketing spend ÷ new customers acquired. If you spent $20,000 in a month and acquired 100 customers, your CAC is $200.

For premium DTC brands, CAC has been climbing for years as paid ad costs rise and targeting gets harder — the "ROAS doom loop," where you spend more to win the same customer. A high CAC eats margin and caps growth, especially on high-ticket products with long consideration cycles.

Advocacy is one of the few channels that lowers CAC over time instead of raising it: your existing customers help convert prospective buyers, and the channel compounds as your advocate community grows. See how Stoked lowers CAC and how to measure advocacy's impact with the Brand Advocacy Ratio.

CAC FAQs

Quick answers about customer acquisition cost.

01

Divide your total sales and marketing spend over a period by the number of new customers acquired in that same period. Include ad spend, tooling, and the marketing team’s cost for an accurate figure.
02

It depends entirely on your margins and average order value — CAC only matters relative to customer lifetime value (LTV). For high-ticket DTC, a single sale can justify a high CAC, but lowering it directly expands margin.
03

Advocate conversations convert prospective buyers without per-click ad spend, and the channel compounds as more customers join. Over time that shifts acquisition away from ever-pricier paid media.

Lower Your CAC

See how Stoked lowers customer acquisition cost with an owned channel that compounds, or book a demo.