If you ask ten D2C founders to define their Customer Acquisition Cost (CAC), you’ll get ten different answers. On the web and internet forums, especially on Reddit threads and founder Discord channels, CAC is the number everyone shares but few measure with full transparency. Measuring, calculating, and applying Customer Acquisition Cost is seldom performed correctly and utilized in a manner that D2C brands can benefit from.
This guide breaks down how the top D2C operators actually measure CAC, where most brands get it wrong, and the practical frameworks you should use to track, analyze, and lower CAC in 2025.
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For modern D2C brands, Customer Acquisition Cost (CAC) is a mirror reflecting the efficiency and sustainability of growth for your business. At its core, CAC measures the average spend required to acquire one new customer, but the “real meaning” emerges when it’s viewed in the context of profitability and scale.
Beyond ad spend, CAC should include salaries, tools, creative costs, and agency fees, offering a holistic picture of everything it takes to win over a new customer. For early, fast-growing brands, an inflated CAC can scare investors and signal that the funding required to scale growth is incredibly high. However, a well-managed CAC paired with a strong Lifetime Value (LTV) becomes proof of long-term success.
The modern D2C landscape is crowded with paid social, influencer marketing, and rising competition. In the era of Agentic AI pumping out websites and business frameworks, this rising competition is exponential, but still easily surpassed (if you know what you're doing). This new market demands that brands treat CAC not as a fixed number but as a strategic compass for growing their business. Segmenting CAC by channel, campaign, or cohort reveals where acquisition is most cost-effective, while comparing it against LTV highlights whether a brand’s efforts are driving sustainable retention or just short-term wins.
In practice, this means that lowering CAC is about allocating spend effectively (rather than cutting it outright), leveraging first-party data, building loyalty, and ensuring each customer relationship justifies the investment.
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The CAC formula looks deceptively simple: Total acquisition spend divided by the number of new customers acquired. In reality, few brands calculate it correctly because they fail to account for the full range of costs associated with marketing to their target audience. CAC isn’t just ad spend; it also includes influencer fees, content production, agency retainers, affiliate commissions, discounts, and even the salaries of the sales and marketing teams. When these elements are ignored, brands end up with an artificially low CAC, creating a false sense of efficiency and leading to misguided growth decisions.
What makes it even trickier is that CAC is not a static number and, especially for new brands, it's going to change frequently. It varies by channel, geography, and customer segment. Many D2C brands rely too heavily on cut-and-dry numbers with verified outputs, like paid media, and neglect attribution complexity, retention engine dynamics, and funnel optimization. The result is vague acquisition costs with little focus on whether those customers stay long enough to be profitable.
In order to get CAC right, you'll need to segment by channel, track costs holistically, and pair the metric alongside Customer Lifetime Value (LTV). Without that discipline, brands risk chasing vanity growth instead of building sustainable unit economics that translate into coordinated strategic growth.
Don't be afraid to add more to your CAC formula. If you or anyone on your team believes that a cost, tactic, or piece of the budget crosses paths with any part of the user acquisition journey, add it to your formula.
Integrating these methods into your overarching tracking and measurement strategy gives you an edge over the competition, keeps your investors informed, and your accounting team happy.
Operators use New CAC when you want to measure the true cost of growth and how much you’re spending to bring in first-time customers, effectively expanding your customer base, which is critical for early-stage companies, scaling brands, or when testing new channels.
Blended CAC is best when you want a holistic view of overall marketing efficiency, factoring in both new and repeat consumers, which makes sense for businesses with a few years in the market, executing strong retention and loyalty programs. In practice, brands often track both: New CAC to ensure growth is sustainable and Blended CAC to assess total marketing performance and budget effectiveness.
Our suggestion? Ensure you track both and that your dashboards do the same.
Here is solid data we could find from Userpilot referencing common industry CACs for D2C e-commerce verticals:
These CAC benchmarks are useful as rule-of-thumb reference points to understand the general cost of acquiring customers in e-commerce. They give you a sense of what’s typical across industries and help highlight how expensive or efficient certain categories can be.
That said, they should be taken with a grain of salt, since CAC varies widely by channel, region, competition, and business model. It's important to note that your actual costs may look very different.
Measuring CAC effectively is about understanding the full context behind those numbers. The most successful D2C businesses don’t just track CAC in isolation; they layer it against customer lifetime value (LTV), segment by acquisition channel, and continuously refine their strategies based on real data. By doing the same, you can turn CAC from a static metric into a powerful decision-making tool that guides smarter spending, refines your ROI measurement tactics, enables sharper targeting, and drives sustainable growth.
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