Skip to content
SM Blueprint
Step 1 of 10 in this module#911 of 1,000

1. Customer Acquisition Cost (CAC): The Price of a New Fan

Part 10 • Customer Acquisition Cost (CAC) and Lifetime Value (LTV)

Customer Acquisition Cost (CAC) is the total cost associated with convincing a prospective customer to buy a product or service. For the Creator Enterprise, a "customer" could be a new email subscriber, a first-time merch buyer, or a new Patreon supporter. It includes all marketing and sales expenses incurred to acquire that customer.

<ul> <li><strong>Formula:</strong> `Total Marketing & Sales Spend / Number of New Customers Acquired`</li> <li><strong>Example:</strong> You spent $1,000 on Meta Ads in a month, and those ads resulted in 50 new first-time merch buyers. <br>`CAC = $1,000 / 50 = $20 per new merch buyer`.</li> </ul> CAC tells you exactly how much you are paying to bring a new paying fan into your ecosystem. You can (and should) calculate CAC for different acquisition channels (e.g., CAC from TikTok ads vs. CAC from Google ads).

See a way to improve this point?

Community Driven

Help us keep this 1,000-point curriculum sharp for all creators. Suggest a wording tweak, report a changed tool, or share your thoughts.

Loading user progress & flight station...
In this module: Customer Acquisition Cost (CAC) and Lifetime Value (LTV)10 steps
  1. 1Customer Acquisition Cost (CAC): The Price of a New Fan
  2. 2What to Include in "Total Marketing & Sales Spend" for CAC
  3. 3Lifetime Value (LTV): The Total Worth of a Fan
  4. 4Why LTV is Not Just Purchase Value
  5. 5Calculating the LTV:CAC Ratio (The North Star)
  6. 6The Strategic Importance of the 3:1 Ratio
  7. 7How to Improve Your CAC
  8. 8How to Improve Your LTV
  9. 9The Data-Driven Approach: Continual Monitoring
  10. 10Your Actionable LTV and CAC Strategy