What is CAC?

How CAC actually works

Pick a month. Add paid media, the salaries attached to acquisition, creative and video costs, affiliate payouts, and the money you gave away in launch coupons. Divide by new customers only, because repeat buyers sitting in that denominator are how dashboards quietly flatter a number that decides your entire budget.

Shopify will tell you which orders came from first-time buyers. Use it. On WooCommerce, match on phone number rather than email, since Indian shoppers change email addresses far less often than they check out as guests.

Where teams get CAC wrong

Blending everything into one company-wide number is the classic error. Your CAC on branded Google search is not your CAC on Meta prospecting, and because branded search is mostly people who had already decided to buy, it drags the average down and hides how expensive genuine discovery has become. That gap matters.

Another one: excluding discounts. A Rs 500 launch coupon on a Rs 2,000 order is Rs 500 of acquisition cost, spent at a different point in the funnel.

Then the timing mismatch. You paid in March, they bought in April, and monthly CAC swings wildly on long consideration cycles, which is why a Sohna Road site visit sitting ninety days behind the click that started it needs quarterly cohorts rather than months.

What good looks like in India

The only benchmark that matters is your own LTV. Rs 900 is excellent if buyers reorder four times and terrible if they never come back. Across Indian D2C the usual working rule is that first-order contribution margin should cover a meaningful slice of CAC, with the rest earned back inside two or three repeats.

Watch the trend harder than the level. Rising CAC at flat spend means tired creative or a saturating audience, while rising CAC as you scale is simply what scaling costs. Confusing the two gets working campaigns killed.