## 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](/solutions/lower-cac/) and how to measure advocacy's impact with the [Brand Advocacy Ratio](/brand-advocacy-ratio/).

## CAC FAQs

Quick answers about customer acquisition cost.

01
## How do you calculate CAC?

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
## What's a good CAC?

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
## How does brand advocacy lower CAC?

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](/solutions/lower-cac/) with an owned channel that compounds, or [book a demo](/demo/).