CAC (Customer Acquisition Cost)
The total cost of acquiring one paying customer. Marketing spend + sales cost, divided by new customers.
CAC includes ad spend, content marketing costs, sales salaries, tool costs — anything spent to generate revenue. Divide the total by new customers acquired in that period. Indie founders often underreport CAC by ignoring their own time; a realistic CAC includes an hourly rate for founder effort. If your LTV is $600 and CAC is $200, ratio is 3:1 and you're healthy. If CAC exceeds LTV, you're paying to acquire customers who lose you money — a common trap in the first year of paid ads.
Related terms
LTV (Lifetime Value)
The total revenue a customer generates before they churn. What you can spend to acquire them.
MRR (Monthly Recurring Revenue)
The predictable monthly revenue from active subscriptions. The indie-founder scoreboard metric.
PLG (Product-Led Growth)
A go-to-market motion where the product itself drives acquisition, activation, and expansion.