Social media customer acquisition cost: what is a good CAC?

Key takeaways

Social media customer acquisition cost (CAC) is everything you spend on social media in a period divided by the new customers it produced. Include staff or agency time, ad spend and tools, not just ads. A good CAC is one comfortably below the gross profit a customer brings, ideally over their lifetime, and falling over time.

• CAC = total social media cost ÷ new customers from social.
• Include time, agency fees, ad spend and tools.
• Illustrative: £2,000 a month ÷ 10 customers = £200 CAC.
• Compare CAC with gross profit per customer, not with revenue.

What is customer acquisition cost?

Customer acquisition cost (CAC) is the total cost of winning a new customer through a channel, calculated as the channel's full cost in a period divided by the number of new customers it brought in that period. For social media it shows whether the followers you convert are worth what you spend.

• How UK businesses can turn social media followers into customers
• How to measure social media ROI

How do you calculate social media CAC?

Add up everything social media cost you in a month or quarter, then divide by the new customers you can attribute to it. Use the same period for both, and count customers, not leads.

• Agency or freelancer fees: £1,200.
• Ad spend: £500.
• Staff time replying to messages: 15 hours at £16.27 = about £245.
• Tools: £55.
• Total £2,000 ÷ 10 new customers = £200 CAC. Illustrative figures.

• Social media agency pricing in the UK

How do you know which customers came from social media?

Combine three sources: tagged links and key events in Google Analytics 4 (GA4) for website sales and enquiries, your inbox and CRM for message enquiries, and asking every new customer how they heard of you. No single source is complete; together they give a reasonable count.

• Track social media conversions in GA4, step by step
• 'How did you hear about us?' Asking the question properly

What is a good CAC?

A good CAC is one well below the gross profit a customer produces. If a first job makes £600 gross profit and CAC is £200, each customer pays back three times on the first purchase. Businesses with repeat customers can afford a higher CAC, judged against customer lifetime value. A common rule of thumb is lifetime value of at least three times CAC, but treat it as a guide, not a rule.

• Customer lifetime value: what a social customer is worth

How do you bring CAC down?

Bring CAC down by converting more of the people you already reach, not only by cutting spend. A faster reply, a clearer offer and a shorter path raise customers without raising cost. Moving ad spend from cold audiences to warm ones usually lowers CAC too.

• Social media retargeting: win back followers who nearly bought
• Why followers don't buy: the five gaps and how to close them

What are the limits of CAC?

CAC undercounts social media's effect when customers find you on social and buy through search or a recommendation. It also swings month to month in small businesses with few customers. Use a three-month rolling figure, and read it alongside lead quality and lifetime value.

• Marketing attribution for small businesses, kept simple
• Incrementality testing: is social media really driving sales?

What does this look like in practice?

A pattern we see: social media judged on ad spend alone, ignoring the hours the owner spends replying. Including time often changes the picture, and shows that faster, better-organised replies would cut CAC more than any change to the adverts.

• See client work
• Social Media Marketing for UK businesses
• The follower conversion scorecard: find where buyers drop out

CAC checklist

• List every social media cost, including time.
• Count new customers from social media.
• Divide for a monthly figure.
• Use a three-month rolling average.
• Compare with gross profit and lifetime value.
• Track it alongside lead quality.

Next step

Add up last quarter's social media costs, including your own hours, and divide by new customers. Write the figure down as your baseline.