CAC (Customer Acquisition Cost)
The total cost to acquire a new paying customer, the most important metric for evaluating marketing effectiveness
Traditional Background
CAC became central to business strategy with the rise of subscription and recurring revenue models. It represents the total marketing and sales costs divided by the number of new customers acquired, providing a clear metric for marketing efficiency and scalability. Essential for calculating ROI.
Web3 Evolution
In web3, CAC is often overlooked in favor of vanity metrics like impressions or clicks. However, CAC remains the crucial metric for sustainable growth. Web3's transparent nature actually makes CAC easier to calculate accurately, as user actions are recorded on-chain and can be precisely attributed to marketing campaigns using onchain verifiability.
Why It Matters
Without knowing CAC, marketers are flying blind with only vanity metrics like those produced by quests or KOLs. If you can't calculate this number from your advertising campaigns, you should reconsider where your budget is going. CAC enables proper ROI calculations and determines whether marketing campaigns can scale profitably.
How to Calculate
Total marketing spend divided by number of new customers acquired in a given period. In web3, this should focus on users who complete valuable on-chain actions tracked through CPTx or behavioral onchain targeting, not just wallet connections or app visits.