Glossary

What is CAC?

Also called Customer acquisition cost

Short answer

CAC is what you spend to win one new customer. For paid-heavy D2C brands it is usually ad spend (and sometimes discounts) divided by new customers.

Formula

CAC = acquisition spend / new customers

Worked example

₹3 lakh spend and 1,200 new customers is a ₹250 CAC. Compare it to first-order contribution, not to AOV.

This term sits in the D2C analytics hub. Use the related pages below for the full playbook.

Frequently asked questions

What does CAC mean for a D2C brand?

CAC is what you spend to win one new customer. For paid-heavy D2C brands it is usually ad spend (and sometimes discounts) divided by new customers.

Where should I track CAC?

Start in the D2C analytics guide and the linked calculators or product pages. MarQet BI is built around this operating problem.

Related terms and guides

GlossaryLTVLTV is the contribution you expect from a customer over their life with the brand, not just first-order revenue. For early D2C brands, first-order contribution plus a conservative repeat rate is more honest than a long LTV model.GlossaryContribution marginContribution margin is what remains from an order after product cost, shipping, payment fees, discounts, expected RTO/returns and ads. It is the scoreboard for a D2C order.GlossaryAOVAOV is revenue divided by number of orders. It is useful for planning, but a high AOV with high RTO or heavy discounting can still lose money.ToolROAS, MER and CAC calculatorEnter channel spend, revenue and new customers to see platform ROAS, blended MER and CAC. Use it when Meta and Google both claim the same orders.GuideContribution Margin for D2C Brands: Formula, Examples and How to Improve ItHow to calculate contribution margin for a D2C brand in India (CM1, CM2, CM3), with a worked example including COD, RTO, shipping and ads, plus the levers that improve it.

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