Why it matters
Paired with lifetime value, CAC answers marketing's only real question: does a customer return more than they cost to win? A healthy ratio funds confident scaling; an inverted one means growth is just expensive shrinking with better vibes.
How it works
Total acquisition spend over a period divided by new customers won in it: computed per channel, because blended CAC hides that one channel subsidises another. Include the embarrassing costs (sales time, tooling, creative) or the number flatters you into bad decisions.
What to do about it
Compute true CAC per channel this quarter. Scale the channels where LTV comfortably clears it, fix or cut the ones underwater, and re-check as prices drift: auction costs only rise.
