Term · Business Model & Operating KPIs
Customer Acquisition Cost (CAC)
In briefCustomer Acquisition Cost (CAC) is the cost of winning a new customer, typically from sales and marketing including a share of personnel costs. For growth small-caps it shows whether revenue growth arises efficiently or is only bought at a high price.
Definition
Cost of acquiring a new customer, typically sales and marketing including a proportional share of personnel costs.
How it is calculated
Formula. CAC = sales and marketing costs ÷ number of new customers acquired.
Why it matters for small caps
For growth small-caps, CAC shows whether revenue growth is efficient or only bought through expensive customer acquisition.
Common misreadings
- It is often stated too low when sales personnel, discounts, or partner commissions are not fully included.
In the process
Frequently asked
What is Customer Acquisition Cost (CAC)?
It is the average cost per new customer acquired. It mainly comprises sales and marketing expense.
How is CAC calculated?
You divide the sales and marketing costs by the number of new customers acquired. This yields the cost per customer.
Why is CAC often stated too low?
Sales personnel, discounts, or partner commissions are not always fully included. As a result, customer acquisition appears cheaper than it is.
Related terms
Sources
Primary
ESMA – Guidelines on Alternative Performance Measures
https://www.esma.europa.eu/document/esma-guidelines-alternative-performance-measures
https://www.esma.europa.eu/document/esma-guidelines-alternative-performance-measures
Methodology
U.S. SEC – Non-GAAP Financial Measures
https://www.sec.gov/rules-regulations/staff-guidance/corporation-finance-interpretations/non-gaap-financial-measures
https://www.sec.gov/rules-regulations/staff-guidance/corporation-finance-interpretations/non-gaap-financial-measures
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.