FAQ

Frequently Asked Questions

What is Customer Acquisition Cost (CAC)?

Customer Acquisition Cost (CAC) is the total amount a business spends to acquire a new customer. It includes all marketing, sales, and operational expenses used to turn a lead into a paying customer.

How do you calculate Average Customer Acquisition Cost?

The formula for calculating CAC is simple:

CAC = Total Sales and Marketing Expenses ÷ Number of New Customers Acquired.

This gives you the average amount spent to bring in one new customer during a specific period.

What is a good average CAC?

A good CAC varies by industry, but ideally, your Customer Lifetime Value (LTV) should be

What factors increase customer acquisition cost?

Common reasons for a higher CAC include:

  • Poor audience targeting
  • Inefficient marketing channels
  • Low conversion rates
  • Weak onboarding experience
  • High customer churn


How can I reduce my average customer acquisition cost?

You can lower CAC by:

  • Refining your targeting and messaging
  • Using AI-based analytics for campaign optimization
  • Offering a personalized onboarding experience
  • Improving retention through loyalty programs
  • Automating marketing workflows


Does personalized onboarding impact CAC?

Yes. Personalized onboarding helps users find value in your product faster, reducing churn and increasing conversion from free trials — effectively lowering your CAC over time. Platforms like Page Pilot enable businesses to build no-code onboarding flows that improve activation and retention rates.

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Ishaan Puniani

Architect
-Written by
ishaan@fabbuilder.com

I love finding patterns and concluding insights out of it. After working as Employee, a Consultant, a Freelancer I figured out mostly we start our project or a module or microservice either by copying an existing code or base repositories from GitHub lets say. And then spend a lot of time on customising it, analysing pitfalls, making it work so that I can start writing business logic for the work. So, I started POC-ing FAB Builder so that I get a trailered project targetted to my requirements and on which I can start writing business logic within few mins. This makes my life easy and my clients get a better quality products which are easy to modify and easy to maintain.