The Ultimate Guide to Customer Acquisition Cost for Shopify Stores
What is CAC and Why It Determines Ecommerce Success
Customer Acquisition Cost (CAC) measures how much you spend to acquire each new customer. It's the fundamental metric that determines whether your business can scale profitably.
The CAC Formula
CAC = Total Marketing Spend ÷ Number of New Customers
Example: $5,000 spend ÷ 250 customers = $20 CAC
Industry Benchmarks by Business Model
Healthy CAC varies dramatically by product type and business model:
| Business Type | Average CAC | Top Quartile |
|---|---|---|
| DTC Apparel | $22-$35 | $15-$20 |
| Beauty/Skincare | $18-$28 | $12-$16 |
| Electronics | $35-$50 | $25-$30 |
| Subscription Box | $40-$60 | $30-$35 |
The Golden Metric: LTV to CAC Ratio
Customer Lifetime Value (LTV) compared to CAC determines business viability:
< 1:1 Ratio
Losing money on each customer
Danger Zone
1:1 to 3:1
Breaking even to moderate profit
Caution Zone
3:1 to 5:1
Healthy, scalable business
Ideal Zone
5 Advanced CAC Reduction Strategies
1. Channel Mix Optimization
Break down CAC by acquisition channel:
- Paid Social: Typically $15-$40 CAC
- Google Ads: Typically $25-$50 CAC
- Organic Social: $5-$15 CAC
- Email Marketing: $3-$10 CAC
2. Customer Segmentation
Calculate CAC by customer cohort:
- First-time vs. repeat purchasers
- Geographic regions
- Product categories
- Traffic sources
Technical Implementation for Shopify
To accurately track CAC:
- UTM Parameters: Tag all marketing campaigns
- CRM Integration: Connect Shopify to Klaviyo or HubSpot
- Multi-Touch Attribution: Use tools like TripleWhale or Northbeam
- Cohort Analysis: Set up in Google Analytics
Pro Tip: The 30-Day CAC Rule
For sustainable growth:
- Aim to recover CAC within 30 days
- Calculate: 30-Day Revenue per Customer > CAC
- Adjust pricing, AOV, or retention if not achieving