CAC (Customer Acquisition Cost)

Customer Acquisition Cost (CAC) refers to the average of all marketing and sales expenses invested by a foreign trade enterprise to acquire a new customer, including advertising costs, exhibition fees, platform promotion fees, sample costs, sales staff salaries and commissions, etc. It is calculated as: Total Acquisition Cost ÷ Number of New Customers. In foreign trade scenarios, CAC is commonly used to evaluate the input-output efficiency of channels such as Alibaba International Station, Google Ads, LinkedIn, and trade shows, and is compared with Customer Lifetime Value (LTV). The ideal state is that LTV is at least 3 times CAC. Notes: CAC varies greatly across different channels and should be calculated separately by channel; B2B foreign trade usually has higher CAC than B2C due to longer decision cycles and higher average order values; CAC only focuses on the customer acquisition stage and does not include subsequent maintenance costs, so it should be distinguished from Customer Retention Cost (CRC). Terms easily confused with CAC include CPA (Cost Per Action) and CPL (Cost Per Lead), which focus more on single conversions, while CAC emphasizes final closed customers.