What is CAC?

CAC is the number that decides whether paid acquisition can work for your brand at all. On its own it is meaningless — it only becomes useful when you set it against what a customer is worth, first on their opening order and then across their lifetime.

Two versions circulate and they are not interchangeable. Paid CAC divides paid media spend by customers attributed to paid; blended CAC divides all acquisition cost by all new customers, including those who arrived through organic search, referral or word of mouth. Blended CAC is the honest one for planning, because it is the number your bank account actually experiences. Paid CAC is the one to optimise inside the ad account.

For most Indian D2C brands the useful discipline is to hold CAC against contribution margin per order. If a customer contributes ₹1,500 of gross profit on their first purchase and costs ₹1,200 to acquire, you are profitable on order one and can scale hard. If they cost ₹1,800, you are buying growth out of future repeat purchases and need the retention data to justify it.