Customer acquisition cost (CAC) is sales and marketing spending divided by the number of new customers acquired over the same period. Include creative work and relevant tools, not just the ad-platform bill. CAC becomes useful only when compared with the contribution those new customers actually generate and the time needed to recover the cost.
- 01SpendAds + creator + sales effort
- 02New buyersExclude repeat orders
- 03CACSpend ÷ new buyers
The formula
CAC = total acquisition spend ÷ new customers. If a test costs 600 units in ads, 120 in creative production and 80 in other acquisition tools, and yields 20 new customers, CAC is 40 units. This is illustrative. Counting 600 alone would report 30 and make the channel look cheaper than it is. Shopify's acquisition guide specifically includes creative, tools and other sales-and-marketing inputs.
Make the denominator honest
Use first-time buyers, not all orders; repeat purchases do not represent new customers. Compare the same date range and define how you handle cancellations and refunds. A click, message or add-to-cart is not an acquired customer. If a channel's last-click report disagrees with your order history, record both and investigate rather than forcing an exact match.
Compare CAC with value after costs
A first order worth 100 with 35 left before acquisition cannot support a CAC of 40 on its own. Future purchases may change the economics, but do not assume retention that you have not observed. Track first-order contribution and repeat behavior separately. If the gap is negative, try to improve the offer, margin or buying journey before raising spend.
The profit-margin worksheet gives the cost side of this equation. A founder who knows both numbers can decide when growth is helping the business instead of just making the dashboard bigger.
For the same period, add every acquisition expense, count only new customers who completed an order, and compare CAC with first-order contribution.