Here's the quick version: CAC is a vanity metric dressed up as a financial one. It tells you what you paid for a lead, not what that lead is worth.
Contribution margin per lead = (average order value × close rate × gross margin) − CAC. That's the real number. If it's negative, you're paying to acquire customers who make you poorer.
[ Frequently Asked ]
Questions we get on this topic.
Isn't this the same as LTV:CAC?
Related but not identical. LTV:CAC looks over a long horizon. Contribution margin per lead is a 0–90 day number you can act on this week.