CAC (Customer Acquisition Cost)
The total cost of acquiring a new paying customer.
Definition
CAC is the total marketing and sales spend divided by the number of new customers gained over a given period.
In plain English
If CAC exceeds the profit a customer generates, the business loses money on growth. Healthy service businesses target CAC well below the average job's gross profit.
Example
$3,000 spent on Google Ads → 10 new customers → CAC = $300 per customer.
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