Customer Acquisition Cost (CAC)

Customer acquisition cost is the total marketing spend in a period divided by the number of new customers gained. If a restaurant spent $4,000 on ads, social, and SEO in a month and acquired 200 new customers, CAC is $20.

For restaurants, CAC is harder to calculate than for ecommerce because most customers do not identify themselves on the first visit. Approximations work: count first-time POS phone numbers, first-time loyalty signups, or use survey-based attribution. The exact number matters less than the trend over time and the comparison to lifetime value.

The healthy ratio is LTV-to-CAC of 3:1 or better. A new customer worth $300 over their relationship to the restaurant should cost $100 or less to acquire. Below that ratio, growth is unprofitable; well above it, you are probably under-investing in acquisition.

CAC by channel is the more actionable cut. Local SEO traffic typically has the lowest CAC (often near-zero in cash terms — only time and software). Paid social tends to be the highest. Knowing the CAC of each channel lets you reallocate without guessing.

Without a CAC number, marketing spend is faith-based. Restaurants either over-invest in expensive channels (paid ads) or under-invest in cheap ones (local SEO, GBP management) because they cannot see the comparative ROI. Even a rough CAC by channel — calculated quarterly — changes the spending mix.