--- title: "Customer Acquisition Cost (CAC): How to Calculate | Jirav" description: Customer Acquisition Cost is the cost of acquiring a new customer. It helps companies determine the effectiveness of their marketing and sales strategies. --- ![](https://www.jirav.com/hs-fs/hubfs/Imported%20sitepage%20images/header-logo.png?width=98&name=header-logo.png) - [ Resources ](https://www.jirav.com/resources) - Menu / Resources - [Resource Center ](https://www.jirav.com/resources) Blogs and resources on all things finance, FP&A, and Jirav [Webinars ](https://www.jirav.com/webinars) Learn more about Jirav and FP&A from industry experts [Events ](https://www.jirav.com/events) See our upcoming calendar of events [Help Center ](https://help.jirav.com/) Guide on how to use Jirav - [ Company ](https://www.jirav.com/company) - Menu / Company - [About ](https://www.jirav.com/company) Learn about Jirav’s story and meet our leadership team [News Coverage ](https://www.jirav.com/news) See the latest news and highlights [Press ](https://www.jirav.com/press-releases) Recent company announcements and updates [Careers ](https://www.jirav.com/careers) View current job openings and learn how to join the Jirav Tower ![business_env](https://www.jirav.com/hubfs/business_env.svg) [ For Businesses ](https://www.jirav.com/reporting-planning-purpose-built-for-businesses) ![accounting_calc](https://www.jirav.com/hubfs/accounting_calc.svg) [ For Accounting & CFO Firms ](https://www.jirav.com/reporting-planning-purpose-built-for-accounting-cfo-advisory-firms) [ Get a Demo ](https://www.jirav.com/request-demo) [ Sign in ](https://app.jirav.com/) ![](https://www.jirav.com/hubfs/April2021/images/banner-shap.png) BLOG # Customer Acquisition Cost (CAC): How to Calculate | Jirav [![](https://www.jirav.com/hubfs/April2021/images/fb-icon.png) ](http://www.facebook.com/share.php?u=https://www.jirav.com/ecommerce-metrics-library/customer-acquisition-cost/) [![](https://www.jirav.com/hubfs/April2021/images/tw-icon.png) ](https://twitter.com/share?url=https://www.jirav.com/ecommerce-metrics-library/customer-acquisition-cost/) [![](https://www.jirav.com/hubfs/April2021/images/in-icon.png) ](http://www.linkedin.com/shareArticle?mini=true&url=https://www.jirav.com/ecommerce-metrics-library/customer-acquisition-cost/&summary=&source=CeBIT) 1 minute read ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) ### What is CAC? CAC is the cost of acquiring a new customer. It includes all of the expenses associated with attracting, converting, and retaining a customer. These costs can include marketing expenses, sales commissions, and any other expenses incurred to generate a sale. ### Why CAC Is Important CAC is important, because it can help companies determine the effectiveness of their marketing and sales strategies. By understanding how much it costs to acquire a customer, companies can evaluate the profitability of their customer acquisition efforts and adjust their strategies accordingly. CAC can also help ecommerce companies compare the costs of different marketing and sales channels, allowing them to make informed decisions about where to invest their resources. ### How to Calculate CAC One way that CAC can be calculated is by dividing the total amount spent on marketing by the number of orders as follows: CAC = Paid Marketing Expense / Number of Orders ##### Jirav Published April 25, 2023 ###### Related topics - [Metrics library](https://www.jirav.com/ecommerce-metrics-library/tag/metrics-library) - [E-commerce metrics library](https://www.jirav.com/ecommerce-metrics-library/tag/e-commerce-metrics-library) ## Related blog posts ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### What is Average Order Value (AOV)? | Jirav [ Read more ](https://www.jirav.com/ecommerce-metrics-library/average-order-value) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### Cost per Click (CPC) Explained & How It's Calculated | Jirav [ Read more ](https://www.jirav.com/ecommerce-metrics-library/cost-per-click) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### What Is Contribution Margin? 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