Overview
CAC, or customer acquisition cost, is the total cost to acquire one new customer. Unlike CPA, which often counts just ad spend per order, a full CAC includes commission, samples, tooling, and the team effort behind acquisition.
It is the number you weigh against customer lifetime value to know whether growth is sustainable.
How it works
Add up everything you spent to win customers in a period (ads, commission, sampling, allocable team cost) and divide by the number of new customers. That is your blended CAC.
Why it matters
CAC only makes sense next to LTV. If it costs more to acquire a customer than they are worth over time, the model leaks. A healthy LTV-to-CAC ratio is what makes a creator program a real growth engine.
Common benchmarks
A common health benchmark is the LTV-to-CAC ratio:
- Under 1:1Losing money per customer
- Around 3:1Often considered healthy
- Well above 3:1Room to spend more to grow
These ranges depend on your monthly TikTok Shop GMV tier, ad and sample budget, SKU mix, category, and how aggressively you coach the program. Treat them as a band, not a guarantee.
How brands use it
Brands track blended CAC across their creator program and compare it to LTV, scaling acquisition when the ratio is healthy and tightening when it slips.
