The CAC (Customer Acquisition Cost) is a key metric for assessing how well a business turns its marketing and sales expenses into real customers. To put it in a simpler way, the CAC is the aggregate expense that every business incurs to bring in one new customer. For growth-oriented teams utilizing mobile measurement partners such as Apptrove, CAC provides an anchor point of reference in connecting the output of marketing and sales with their impact on profitability.
CAC is more than just a number for finance teams; it has now become indicative of both opportunity and growth for businesses in the modern-day digital world. By tracking installs, registrations, and downstream conversions for every web, mobile, and paid channel with tools like Apptrove, marketers can understand both the quantity of users they have garnered and how much it costs (at a more granular level) to obtain each customer.
The Customer Acquisition Cost (CAC) measures the total costs associated with converting an interested individual into an active user (also known as paying customer) over a specific period of time. When Apptrove tracks installs, registrations, and downstream conversion events across web, mobile, and paid channels, it allows marketers to see not only how many users they acquired, but how much it truly cost to acquire each customer at a granular level.
What is Customer Acquisition Cost?
Customer Acquisition Cost, commonly abbreviated as CAC, measures the full cost of converting a potential user into a paying customer over a defined period of time. This includes every resource used in the acquisition process, including advertising spend, creative production, agency fees, software tools, sales team salaries, marketing team costs, and onboarding expenses.
CAC answers a single, powerful question that how much money does it take to bring in one new customer.
The concept of CAC has become central to digital marketing because modern customer journeys are no longer linear. Users might see an ad on Instagram, click a Google Search result, install an app, drop off, return via email, and finally convert. Without accurate attribution and cross-channel visibility, most businesses underestimate their CAC. This is exactly where platforms like Apptrove help close the gap between campaign data and real customer acquisition cost.
CAC Formula
Customer Acquisition Cost is calculated using a simple but often misunderstood formula:
CAC = Total acquisition costs ÷ Number of new customers acquired
Total acquisition costs include all marketing and sales expenses during the same time period in which customers were acquired. This covers paid advertising, influencer campaigns, creative production, marketing tools, CRM platforms, salaries of sales and marketing teams, and any onboarding or conversion infrastructure used to bring users into paying customers.
For example, if a company spent ₹5,00,000 in one quarter across advertising, marketing salaries, and tools, and acquired 200 new customers in that same quarter, the CAC would be ₹2,500 per customer.
Why CAC Matters in Growth Marketing
CAC is not just a reporting metric. It is a strategic control lever. When CAC is high, growth becomes fragile. When CAC is controlled and predictable, scaling becomes possible.
In app-driven businesses, especially those relying on paid acquisition, CAC tells you whether your growth is sustainable or inflated. If your CAC increases while revenue per user remains flat, profitability shrinks even if install volume looks strong. This is why growth teams measure CAC alongside Customer Lifetime Value (LTV). A commonly accepted benchmark is that LTV should be at least three times higher than CAC to support long-term profitability.
For Apptrove users, CAC becomes more reliable because it is calculated on top of clean attribution. Instead of assuming where users came from, marketers can connect installs, sign-ups, purchases, and revenue back to the actual campaigns and links that drove them.
CAC Benchmarks Across Industries
There is no universal “good” CAC. What is healthy depends on industry, product type, customer lifetime, and sales cycle length. However, benchmarks help teams understand whether their acquisition costs are within reasonable range.
In eCommerce, global averages for CAC typically fall between $60 and $80 per customer. In SaaS and B2B software, CAC is usually much higher because sales cycles are longer and include human sales teams. Telecom and financial services often see CACs in the hundreds of dollars because of compliance, onboarding, and infrastructure costs.
What matters more than the number itself is how CAC behaves over time. If CAC steadily increases, it indicates channel saturation, audience fatigue, or inefficient targeting. If CAC declines while revenue stays stable, it is a signal that marketing efficiency is improving.
CAC vs CPA
CAC is often confused with CPA, or Cost Per Acquisition. While they sound similar, they measure different things. CPA refers to the cost of a specific action such as an install, lead, or form submission. CAC measures the cost of acquiring a real customer who generates revenue.
A campaign might have a low CPA but a high CAC if many of those users never convert into paying customers. This is why CAC is considered a stronger business metric than CPA, especially for subscription apps, SaaS platforms, and marketplaces.
Real-World Use Cases of CAC
In mobile app marketing, CAC helps teams understand whether paid installs are translating into revenue. A gaming app might generate millions of installs, but if the CAC is higher than what players spend in-app, the growth is unsustainable.
In SaaS businesses, CAC determines how much can be invested in sales teams and paid acquisition. If CAC is too high, growth stalls. If it is controlled, companies can confidently scale outbound and paid channels.
In eCommerce, CAC helps brands decide how much they can afford to spend on ads during sales events, festive campaigns, and seasonal promotions while still maintaining margins.
For investors and founders, CAC is one of the most important metrics used to evaluate whether a company’s growth model is viable over the long term.
Summing Up
Customer Acquisition Cost is not just a marketing metric. It is the economic reality of growth. Every click, every install, every sales call, and every conversion flows into CAC. When measured accurately and interpreted correctly, it tells you whether your business is building something scalable or simply spending to look big.
With Apptrove’s ability to unify attribution, user journeys, and performance data, CAC becomes a truth metric rather than an estimate. And in a world where growth is expensive and attention is limited, that truth is what separates sustainable brands from fragile ones.