Calculate and optimise your customer acquisition cost (or CAC)
Customer acquisition cost (CAC) is a key metric for companies seeking to optimise their profitability.
It measures the financial effort required to acquire new customers.
Good management of this KPI helps companies to adjust their marketing and sales campaigns and strategies while maintaining their financial health.
This article explores everything you need to know about customer acquisition cost: definition, calculation and strategies for optimising it.
What is the customer acquisition cost (CAC)?
Customer acquisition cost represents the total amount invested to convert a prospect into a customer. Unlike other indicators such as LTV (Lifetime Value) or ROI (Return on Investment), CAC focuses exclusively on acquisition-related costs.
Why is measuring the cost of customer acquisition crucial?
A good CAC reflects an efficient marketing strategy. When it is well managed, it optimises the company's overall profitability.
For example, a company with a CAC of €200 and a LTV of €800 generates a positive ROI.
This metric has a direct impact on:
- Strategic decisions, such as the choice of marketing channels.
- Overall financial health.
- Long-term investments to ensure growth.
How to calculate the customer acquisition cost?
The CAC is calculated using the following formula:
CAC = Total marketing + sales expenditure / Number of customers acquired
Here are the key elements to include in this calculation:
- Marketing expenditure: advertising costs, content, SaaS tools.
- Sales expenses: salaries, commissions, events.
- Indirect costs: training, infrastructure.
Example in figures: simple calculation of the CAC
Let's take the example of a company that has invested €10,000 in marketing (paid search, influence, marketing team salaries) to acquire 50 new customers.
CAC = €10,000 / 50 = €200
This amount indicates that each customer costs the company €200.
Of course, this is a very simplistic example, but in interpreting this figure we can detect some interesting insights, such as the effectiveness of advertising campaigns, the relevance of the acquisition channels used, and the potential for reducing costs through strategic adjustments.
It is also crucial to compare this CAC with the company's average LTV to determine whether it is too high or whether it reflects a profitable strategy.
3 common mistakes to avoid when calculating the cost of acquisition
Here are some common mistakes to avoid when calculating the cost of customer acquisition.
A discrepancy with reality can lead you astray in the strategic choices you make as a result of your calculation.
- Forgetting indirect costs: training or upgrading teams are often overlooked.
- Confusing overall CAC with CAC per channel: as each channel performs differently, segmentation is crucial.
- Incorrect allocation of CAC: make sure you associate expenditure with the right marketing levers.
5 strategies to optimise your cost of acquisition
Optimising the cost of customer acquisition is a priority for any company that wants to combine performance and profitability.
Here are five strategies for reducing your expenditure without compromising your growth.
1. Create a loyalty and referral program
Referral and loyalty programmes, like those offered by Loyoly, reduce the cost of customer acquisition by exploiting social proof. For example: a satisfied customer recommends your product to a friend or family member or on social media.
This recommendation, whether online or physical, increases the trust and credibility of the brand and generates more conversions for a similar acquisition budget.
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Reducing your CAC is strategic for your business, and we can probably help. Check out our referral platform!
2. Automate your marketing campaigns
Automating your marketing campaigns using tools such as CRM or marketing automation allows you to :
- Reduce manual tasks.
- Increase the accuracy of campaigns.
- Reduce the time spent on acquiring new customers.
3. Improve your audience segmentation
Identify your most profitable targets. Why invest heavily in a segment that brings little return when other segments offer major opportunities?
Loyoly can help you at this stage, particularly in segmenting your customers to identify your most profitable segments.
Find our advice and segmentation methods in this blog post on RFM segmentation.
4. Optimise the customer journey
A smooth customer journey increases conversion rates. Reduce friction by simplifying the registration or payment process.
For example, we advise our customers to create an omnichannel customer journey, in which all the interactions a customer has with a brand, across various channels, are consistent and connected.
We've written an article on this topic to build the ideal customer journey for a company that wants to harmonise its customer experience through omnichannel.
5. Invest in content marketing
Creating relevant content improves your SEO by increasing your site's visibility on search engines and social media.
When your articles, guides or videos respond to your prospects' needs and questions, they attract qualified traffic without having to invest heavily in advertising campaigns.
What's more, evergreen content, such as tutorials or case studies, generates leads over the long term.
This approach reduces your advertising spend and strengthens your authority in your sector.
How to use the cost of acquisition to monitor your marketing strategy
The cost of customer acquisition is much more than just a financial indicator.
It is a strategic tool that helps you to guide your marketing choices and maximise your return on investment.
Interpreting the CAC in your marketing analyses
Incorporate the CAC into your marketing dashboard to obtain an overall view of the profitability of your actions.
However, CAC should not be analysed in isolation. The relationship between CAC and LTV (Lifetime Value) is essential:
- An ideal CAC/LTV ratio is around 1/3. This means that the cost of acquiring a customer is more than offset by the revenue it generates.
- A higher LTV indicates strong loyalty and better profitability per customer, and that we can afford to reinvest in customer acquisition.
For example, if your CAC is €200 and your LTV is €800, the 1/4 ratio reflects an effective strategy.
Conversely, a CAC equal to or greater than LTV indicates excessive spending, calling for strategic adjustments.
To find out more, consult our guide: understanding the CAC/LTV ratio for your profitability.
Analysis by channel: where should you invest for the best return?
Compare the performance of your acquisition channels.
For example, a detailed table might show that email campaigns offer a better return than paid ads.
However, we don't advise you to focus on just one channel.
On the contrary, multiplying your channels will increase your chances of reaching your target, and once you've reached it, you'll be able to build a fluid and lasting relationship.
Success story: reducing your CAC thanks to a referral program
The case of Hindbag is a perfect illustration of the impact of a referral program.
Hindbag, a brand committed to producing eco-responsible bags, was looking to increase its sales while reducing its acquisition costs.
Working with Loyoly, they set up a tailor-made referral programme based on social proof and customer recommendations.
The results were spectacular:
- x2.5 on the LTV of the cohort involved in the programme
- +140k generated thanks to the viral effect of referral.
- 3% of customers acquired through referral
- +7000 opt-in emails & SMS
- +3000 customer reviews collected
- +300 UGC (with image rights!)
And a significant reduction in CAC, as each recommendation enables customers to be acquired at a lower cost.
This program has enabled Hindbag to transform its satisfied customers into active ambassadors, while reinforcing its brand image.
For more details, read our article explaining the Hindbag case study.
3 trends to keep an eye on to control your cost of acquisition in 2025
Controlling your customer acquisition cost in 2025 means following some key trends that are redefining marketing strategies.
Automation and AI
Artificial intelligence is transforming CAC management.
Tools such as Nosto, HubSpot and Salesforce can automate critical tasks such as segmentation, message personalisation and data analysis.
For example, AI can identify the best-performing channels in real time and adjust your campaigns to reduce unnecessary expenditure.
User Generated Content (UGC)
User-generated content, such as reviews or recommendations, reinforces social proof.
This encourages new customers to make a purchase without the need for heavy advertising investment.
Referral programmes
these programs are gaining in popularity for their unbeatable ROI.
Offering rewards encourages your existing customers to become your ambassadors, reducing CAC while increasing loyalty.
The cost of customer acquisition is a key metric for maximising profitability
Controlling the cost of customer acquisition is essential for aligning your marketing and financial objectives. Loyoly's solutions, which specialise in loyalty and referral programmes, enable you to effectively reduce your CAC while increasing your conversions.
Ask for a free demo to find out how Loyoly can reduce your customer acquisition costs.
