Blended CAC divides spend by all customers, including repeat buyers who would have come back anyway, which flatters it. New-customer CAC shows what it really costs to grow the customer base.

Compare it with first-order contribution. If the first order does not cover new-customer CAC, the brand relies on repeat purchases to recover the cost, and the payback period becomes the number to watch.

Formula

New-customer CAC = Marketing spend ÷ New customers

Example

₹6,00,000 of spend and 1,500 first-time customers is a new-customer CAC of ₹400.

Work it out: LTV:CAC and payback

Model contribution lifetime value from repeat behaviour, then see your LTV:CAC ratio and payback month.

Related terms

Where this comes up

Operator’s Notes, Issue 02: Your October numbers aren’t comparable to September’sMeta changed three defaults in your ad account in the last week of October, right before Diwali. What that does to your creative reports, ads arriving inside AI answers in India, where festive demand really moved, and a 30-minute pre-scale check. How to set break-even ROAS for every campaignA step-by-step method for working out the ROAS each campaign needs to make money, from your own margins, and using it to decide what to fix, cut and scale.

Part of the growth marketing glossary by Shiva Sharma.