# What is CAC? Definition & Technical Mechanics

> **Source:** [SPIDITS AI Startup & Venture Intelligence Glossary](https://spidits.com/startup-glossary)  
> **Category:** Metrics  
> **Canonical Citation:** [https://spidits.com/startup-glossary/cac](https://spidits.com/startup-glossary/cac)

## Definition
CAC (Customer Acquisition Cost) is the total cost required to acquire a new customer, including all sales and marketing expenses.

## Architectural Mechanics & Deep Dive
CAC (Customer Acquisition Cost) is the total cost required to acquire a new customer, including all sales and marketing expenses (salaries, ad spend, software) divided by the number of customers acquired during that period. Monitoring CAC is critical for assessing marketing efficiency and ensuring that customer acquisition is sustainable relative to the lifetime value of the customer.

## Industry Applications & Real-World Use Cases
Ad spend budgets and marketing efficiency monitoring

## Frequently Asked Questions

### How is CAC calculated?
CAC = Total Sales and Marketing Expenses / Number of New Customers Acquired.

### What expenses are included in CAC?
Marketing ad spend, salaries of sales and marketing staff, software tools, and onboarding costs.

## Related Terminology
- [ltv](https://spidits.com/startup-glossary/ltv)
- [unit-economics](https://spidits.com/startup-glossary/unit-economics)
- [ltv-cac-ratio](https://spidits.com/startup-glossary/ltv-cac-ratio)

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*From the SPIDITS AI Knowledge Base (300+ terms indexed). Explore full technical definitions: [https://spidits.com/startup-glossary](https://spidits.com/startup-glossary)*