In short
Customer acquisition cost (CAC) is the average amount a company spends to win one new customer. It is calculated by dividing total sales and marketing costs for a period by the number of new customers won in that period. Teams compare it with customer lifetime value to judge whether growth is profitable.
Why it matters for apps
Acquiring users is expensive, and that money is only recovered if users stay. CAC tells you what each new customer costs, so you can see whether growth pays off.
- Unit economics: Comparing CAC with customer lifetime value (CLV) shows how long it takes to earn back the cost of a customer.
- Retention link: Users who churn early never repay their CAC, so better retention makes every acquisition euro work harder.
- Common mistake: Leaving out costs such as salaries, tools or agency fees. That makes CAC look lower than it is.
- Design choice: Track CAC per channel, so you can shift budget to channels, such as referrals, that bring in customers at lower cost.
Industry examples
A neobank compares the CAC of paid social campaigns with the cost of its referral rewards to decide where to spend next quarter (hypothetical).
A scooter app calculates CAC per city to see where launch promotions bring in riders who keep riding (hypothetical).
Build it with StriveCloud
StriveCloud does not calculate CAC, which belongs in your marketing and finance data. Gamified retention keeps acquired users active for longer, which lowers your effective CAC. Currencies granted for referrals also reward users who bring in friends.
Want to try this? See gamified loyalty
Frequently asked questions
What is customer acquisition cost?
Customer acquisition cost (CAC) is the average amount spent on sales and marketing to win one new customer in a given period.
How do you calculate CAC?
Divide total sales and marketing costs for a period by the number of new customers acquired in that same period. Include salaries, tools and agency fees for an honest number.
How does retention affect CAC?
Retention does not change what you spend to acquire a user, but it decides whether you earn that cost back. Users who stay longer generate more value per acquisition.