As user acquisition gets more expensive and growth budgets tighten, one metric keeps coming up in boardrooms, pitch decks, and marketing stand-ups: Customer Acquisition Cost. Often shortened to CAC, this single number can quietly reveal whether a B2C app is building something sustainable or simply buying growth that won’t last.
Why Everyone Is Talking About CAC Right Now
Not long ago, growth for consumer apps was relatively cheap. Install ads worked, targeting was precise, and scale came fast. That reality has changed. Between platform privacy updates, increased competition, and rising ad prices, acquiring users now costs significantly more than it did just a few years ago. As a result, founders, marketers, and investors are paying much closer attention to how much each new customer actually costs. That’s where CAC comes in.
So, What Is Customer Acquisition Cost?
Customer Acquisition Cost is exactly what it sounds like: the total amount of money you spend to acquire one customer.
Not an install.
Not a sign-up.
A real customer is someone who pays or completes a meaningful action in your app. In simple terms, CAC helps answer a basic but critical question: Are we spending our money wisely to grow this app?
The Simple CAC Formula (No Overthinking)
At its most basic level, CAC is calculated like this: CAC = Total acquisition costs ÷ New customers acquired
Simple, yes but only if the inputs are accurate.
First Things First: Define “Customer”
This is where many B2C apps get it wrong. If you’re counting:
- App installs
- Free users
- Trial users who never convert
You’re not calculating CAC, you’re guessing. For most B2C apps, a customer should mean:
- A paying subscriber
- A user who makes a purchase
- Someone who reaches a clear revenue milestone
Clarity here makes everything else easier.
What Costs Should Be Included in CAC?
CAC isn’t just ad spend. To get a realistic number, you need to include everything that supports acquisition, such as:
- Paid ads on Google, Meta, TikTok, or Apple Search Ads
- Influencer and creator partnerships
- Affiliate or referral commissions
- Marketing agency fees
- Salaries of growth and performance marketing teams
- Tools for analytics, attribution, and experimentation
If a cost exists because you’re trying to grow users, it belongs in CAC.
Pick a Time Frame and Stick to It
CAC only makes sense when measured over a defined period:
- Monthly
- Quarterly
- Campaign-based
Switching time frames mid-analysis can make healthy numbers look bad or hide real problems. Consistency matters.
A Real-World Example
Let’s say a B2C app spends:
- €120,000 on acquisition in one quarter
- And gains 3,000 new paying users
The calculation is straightforward:
CAC = €40 per customer
That €40 becomes a key benchmark for future decisions.
Going Deeper: CAC by Channel
As apps mature, a single CAC number isn’t enough.
Strong teams break CAC down by channel:
- Paid social
- Search
- Influencer marketing
- Organic referrals
This reveals which channels are actually working and which ones are quietly draining the budget. Attribution platforms like AppsFlyer, Adjust, and Branch are often used to support this level of analysis.
CAC Alone Isn’t the Full Story
A high CAC isn’t automatically bad. What matters is what you get back. That’s why CAC is almost always paired with Customer Lifetime Value (LTV) the total revenue a customer generates over time.
A common rule of thumb:
- LTV should be at least three times CAC
If that balance isn’t there, scaling becomes risky very quickly.
Common CAC Mistakes to Watch Out For
Even experienced teams fall into traps, including:
- Counting non-paying users as customers
- Ignoring churn and retention
- Leaving out internal team costs
- Failing to adjust after platform or privacy changes
Small miscalculations can lead to big strategic mistakes.
Why CAC Discipline Matters More Than Growth Alone
In today’s market, growth without efficiency is no longer impressive.
The B2C apps that succeed are the ones that:
- Understand their acquisition economics
- Track CAC honestly
- Adjust quickly when costs rise
CAC isn’t just a finance metric it’s a reality check for the entire business. And in a crowded app economy, reality checks are more valuable than ever.
