Most founders divide their monthly ad spend by the number of orders that month and call it CAC. That number is comforting. It is also wrong.
The Comfortable (Wrong) Formula
CAC = Ad Spend / Orders
This counts repeat customers as new acquisitions, ignores organic traffic, and skips a dozen costs that go into actually acquiring a customer.
The Honest Formula
True CAC = (Paid Marketing + Salaries of Marketing Team + Tools + Agency Fees + Influencer Costs) / Net New Customers Acquired
Two crucial differences:
- Net new customers. Strip out anyone who has ordered from you before.
- Fully loaded marketing cost. Not just ads — your entire marketing function.
Why It Matters
If your "easy CAC" is ₹250 but your true CAC is ₹520, you've been scaling on a number that doesn't survive contact with reality. Most founders find their true CAC is 1.8–2.5× the easy version.
What to Pair It With
CAC alone is meaningless. Pair it with:
- LTV at 12 months (not "lifetime" — most brands haven't existed long enough)
- Contribution margin per order
- Payback period — when does CAC return as gross profit?
A healthy D2C brand has LTV/CAC > 3 and payback < 6 months. Fall outside that and you're either underpriced, over-spending on acquisition, or losing customers too fast.
The StoreDad View
Your StoreDad dashboard computes CAC, LTV, payback, and cohort retention out of the box. No spreadsheets. No tools to wire up. Just the numbers that matter, ready when you open your laptop in the morning.