Customer Acquisition Cost (CAC) is the total amount spent to acquire a new customer. It includes all sales and marketing expenses divided by the number of new customers acquired in a specific period. Understanding CAC is crucial for building profitable affiliate programs.
CAC = Total Sales & Marketing Expenses / Number of New Customers
Calculate CAC for each acquisition channel:
Affiliate CAC = (Affiliate Commissions + Program Management Costs) / Affiliate-Acquired Customers
LTV:CAC Ratio = Customer Lifetime Value / Customer Acquisition Cost
Use our Stripe Affiliate ROI Calculator to:
Ready to optimize your customer acquisition strategy? Start with understanding your current CAC.
Spending $10,000 to acquire 50 customers results in a $200 CAC
If affiliate commissions are $50 and LTV is $500, the LTV:CAC ratio is 10:1
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