Customer acquisition cost (CAC) is the total sales and marketing spend required to win one new customer. You calculate it by dividing those costs over a period by the number of new customers acquired in the same period. On its own the number means little, so most teams read it against customer lifetime value (LTV) to judge whether growth is actually profitable.
How to calculate it
Add up everything spent to bring in customers over a set window: ad spend, marketing salaries and tools, sales team compensation, and agency or commission fees. Divide that sum by the count of new customers won in that window.
CAC = (sales + marketing spend) / new customers acquired
If you spent 10,000 in a quarter and gained 40 customers, your CAC is 250. Be consistent about what you include and which time period you use, or comparisons across months become meaningless.
Why it matters
CAC tells you whether a customer pays back what it cost to acquire them. The common benchmark is the LTV to CAC ratio: roughly 3 to 1 is considered healthy, while a ratio near 1 to 1 means you are spending as much to win a customer as they will ever return. Rising CAC is an early warning that a channel is saturating or targeting has drifted.
CAC in B2B quoting on Shopify
B2B customers usually cost more to acquire because the buying cycle runs through quotes, negotiation, and multiple contacts before a first order. That longer path is offset by larger average orders and repeat purchasing, so LTV tends to be higher too. Watching how many quote requests convert to paid orders, and how fast, gives you a practical read on whether your acquisition spend is working. See related terms in the B2B quoting glossary or review pricing.