Incremental CAC
Incremental CAC is the cost to acquire a customer who *would not have converted otherwise*. It removes 'organic' and 'baseline' customers from the calculation. While Blended CAC makes you feel good, Incremental CAC tells you the truth about your paid media efficiency.
The Short Version
The price of a *persuaded* customer, not a *found* one.
The Blended CAC Lie
Your Blended CAC is $50. You scale spend. Suddenly, Blended CAC spikes to $100.
Why? Because your *Incremental* CAC on paid channels was always $150, but it was hidden by cheap organic traffic.
How it works
Total Ad Spend / (Total New Customers - Baseline Organic Customers)
Or: Marginal Spend / Marginal New Customers
Common Misconceptions
Reporting Blended CAC to the board as 'Marketing CAC' (This is lying)
Assuming Incremental CAC stays flat as you scale (It always rises)
Ignoring the difference between 'New Customer CAC' and 'Retargeting CAC'
Related Terms
Frequently Asked Questions
QIs High Incremental CAC bad?
Not necessarily. If your LTV is high, you can afford a high iCAC. The danger is not *knowing* it is high.