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    Glossary

    CAC (Customer Acquisition Cost)

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    Definition

    CAC, or Customer Acquisition Cost, is the total cost of sales and marketing efforts needed to acquire a new customer. It's calculated by dividing total marketing spend by the number of new customers acquired in a given period. CAC tells you exactly how much you invest to win each customer — and whether your growth model is sustainable.

    Why it matters for Detroit businesses

    Detroit businesses that don't track CAC are spending blind. House of Karma builds high-converting funnels and optimizes ad spend to drive down your customer acquisition cost — connecting ad spend to CRM-tracked revenue so you see the true cost of every new customer and which channels are profitable.

    Frequently Asked Questions

    What is a good CAC?

    A good CAC depends entirely on your business model and customer lifetime value. The key benchmark is the LTV:CAC ratio — most healthy businesses aim for a 3:1 ratio, meaning a customer's lifetime value is at least three times the cost to acquire them. A CAC is only 'good' or 'bad' relative to what that customer is worth over time.

    How do you reduce CAC?

    You reduce CAC by improving conversion rates on landing pages, targeting higher-intent audiences, increasing organic traffic through SEO, automating follow-up to recover leads that would otherwise be lost, and increasing customer lifetime value so you can justify higher acquisition spend. House of Karma addresses all of these as a connected system.

    Related terms

    ROAS (Return on Ad Spend)LTV (Lifetime Value)Conversion Rate

    Put this to work for your business.

    Understanding the terminology is step one. Let's build the systems behind it.

    See Lead Funnels