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Digital Marketing
Customer acquisition cost is the total sales and marketing cost of winning one new customer, including ads, tools, and team time.
CAC is broader than CPA: it includes salaries, software, and agency fees, not just ad spend, divided by new customers in the period.
Comparing it with customer lifetime value shows whether growth is profitable. A common rule of thumb is lifetime value at least three times CAC.
Example
An agency spends PKR 600,000 a quarter on ads, tools, and sales time and wins 6 new retainer clients, a CAC of PKR 100,000.
Why it matters
A business that pays more to win customers than they are worth shrinks as it grows. CAC makes that visible.
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Digital Marketing
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