---
title: "Customer acquisition cost (CAC): definition"
description: "What it costs to win one new customer: spend divided by customers won, or the cost of a visitor divided by the share of visitors who buy."
url: https://offersuite.io/glossary/customer-acquisition-cost
updated: 2026-10-13
---

# Customer acquisition cost (CAC)

What it costs to win one new customer: spend divided by customers won, or the cost of a visitor divided by the share of visitors who buy.

## In plain words

Customer acquisition cost is what you spend to get one new customer. Over a period, it is the acquisition spend divided by the number of new customers it produced.

Seen from the page, it is the cost of bringing one visitor divided by the share of visitors who buy. That second form shows why the offer matters to it. The ad platform sets what a visitor costs. The offer sets how many of them buy. Raise conversion and every customer costs less, with no change to the ads.

## Formula

- CAC = acquisition spend ÷ new customers won
- CAC = cost per visitor ÷ conversion rate

## Worked example

If a visitor costs $0.90 to bring and 3.0% of them subscribe, each subscriber costs $30.00. At 3.6% conversion the same traffic delivers a subscriber for $25.00.

The subscriber is worth $53.29 over a year either way. The engine puts profit per subscriber at $23.29 at the lower conversion and $28.29 at the higher.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## CAC is not cost per order

Acquisition cost belongs to new customers. Dividing spend by all orders, repeat orders and renewals included, gives a smaller and more comfortable number that describes nothing. A renewal cost nothing to acquire: the subscriber was already won.

## Using it

Work it out per offer and per channel, for new customers only. Blended figures hide the campaign that buys customers at twice the average. Then set it against what that customer is worth, on the offer that won them. A cheap customer on an offer that loses money is no bargain.

## In Offer Suite

Offer Suite's simulator takes the acquisition cost as an input, for the whole offer or per option, and reports profit per customer after it. The intro offer comparison works it out from a cost per visitor and each intro's conversion.

Source: Offer Suite's offer simulator.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Subscription payback calculator: CAC and churn** How much a subscriber's first order loses against what you paid to acquire them, how many renewals it takes to earn that back with churn, and in which month.](https://offersuite.io/calculators/subscription-payback)
- [Calculator **Subscription intro offer calculator** Subscribe and save, a discount on the first order, a free trial or a free product: each as a cohort of subscribers with the same costs, ranked on profit per visitor after acquisition.](https://offersuite.io/calculators/subscription-intro-offer)
- [Glossary **Customer lifetime value (LTV): definition** The profit a customer brings over the orders they stay for: the first order's margin plus each later order's, weighted by who is still buying.](https://offersuite.io/glossary/customer-lifetime-value)
- [Glossary **LTV to CAC ratio: definition, formula and example** What a customer is worth divided by what they cost to win. Above 1, acquisition pays for itself within the horizon; how far above is the return.](https://offersuite.io/glossary/ltv-to-cac-ratio)
- [Glossary **CAC payback period: definition, formula and example** How long a customer takes to earn back what they cost to acquire. With churn counted, it is later than the simple division suggests.](https://offersuite.io/glossary/cac-payback-period)