Shopify Ops Glossary
CAC (Customer Acquisition Cost)
The cost of acquiring one new customer.
Definition
CAC is calculated by dividing total marketing and sales spend by the number of new customers acquired in a given period. The CAC:CLV ratio is a fundamental measure of ecommerce business health.
Why It Matters for Shopify Brands
Rising CAC (common as Meta and Google ad costs increase) makes CLV and repeat purchase rate increasingly critical. Ops that drives repeat purchases effectively reduces the effective CAC over time.
Benchmarks
Healthy CAC:CLV ratio: 1:3 or better. CLV/CAC below 1:1 indicates an unsustainable acquisition model.
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