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.
Model contribution lifetime value from repeat behaviour, then see your LTV:CAC ratio and payback month.
Related terms
- CAC (customer acquisition cost)CAC is the total cost of acquiring a new customer, usually marketing spend divided…
- Blended CACBlended CAC is total marketing spend divided by all new customers, whatever…
- CAC payback periodCAC payback period is the number of months it takes for the contribution from a…
- First-order profitabilityFirst-order profitability is whether a new customer’s first order covers the cost…
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.