For small businesses in Lebanon running Instagram shops or e-commerce websites, every dollar counts. One of the most important metrics to track and optimize is Customer Acquisition Cost (CAC) — how much you spend to gain a new customer.

Reducing CAC without hurting growth is possible — especially if you also focus on Average Order Value (AOV) and Customer Lifetime Value (LTV).

What Is CAC?

Customer Acquisition Cost = Total Marketing & Sales Spend / Number of New Customers Acquired

For example: If you spent $300 this month on Instagram ads and got 10 new customers, your CAC is $30.

Businesses that monitor CAC alongside AOV and LTV grow 60% faster than those who don’t."

— Harvard Business Review

Why It Matters in Lebanon

In Lebanon, budgets are tight. Online businesses must maximize every marketing dollar — especially with rising ad costs and limited online purchasing power.

For online businesses — whether operating from Instagram or running a WooCommerce store — every lira spent must produce clear, measurable results.

Ad costs in MENA have increased by over 20% year-over-year, according to Meta Ads Benchmark Reports (2023). That means Lebanese entrepreneurs face rising costs to reach the same audiences. Combined with limited credit card access and cash-on-delivery friction, it's easy for acquisition costs to spiral out of control.

A high CAC indicates you're overpaying to gain customers — often due to vague audience targeting, poor page design, or leaky funnels that lose people between click and conversion. Tracking CAC closely, and pairing it with AOV and LTV, is essential to protect profitability in this challenging market.

Corporate Finance Institute

The CAC, AOV & LTV Triangle

▶ CAC = Cost to Get a Customer

▶ AOV = Average Order Value

Total Revenue / Number of Orders

▶ LTV = Customer Lifetime Value

AOV x Purchase Frequency x Customer Lifespan

Example:

• AOV = $20

• Customer buys 5 times a year

• Stays loyal for 2 years

• LTV = $20 x 5 x 2 = $200

So even if your CAC is $30, it’s worth it, because you’ll make $200 over their lifetime.

Tips to Reduce CAC for Lebanese Online Businesses

Improve Your Targeting

Use Instagram/Facebook custom audiences, local hashtags, and Arabic/Franco Arabic language that resonates with Lebanese users.

Optimize Your Website or Page for Conversion

• Add clear CTAs (DM now, Order link, WhatsApp button)

• Speed up page load times

• Build trust (real testimonials, Lebanese payment/delivery options)

Increase AOV

• Offer product bundles

• Use upsells: “Buy this, get 10% off that"

• Free delivery over a certain threshold

Boost Retention to Improve LTV

• Use WhatsApp Broadcasts or CRM tools to re-engage

• Loyalty cards, discount codes for second orders

• Add value with after-sale support or content

"Increasing customer retention by just 5% can boost profits by 25–95%."

— Bain & Company

Key Takeaways

Want help to improve these numbers?

You didn’t come this far to stop.

You don’t need to spend more to grow. You need to spend smarter.

Track your CAC, increase your AOV, and build strong customer relationships that boost LTV. That’s the formula for a profitable, sustainable business — whether you’re selling from an Instagram page or a full e-commerce site.