Customer Acquisition Cost (CAC)

What is Customer Acquisition Cost (CAC)?

Customer Acquisition Cost (CAC) is the total cost associated with acquiring a new customer, including expenses related to marketing, sales, and onboarding. It is calculated by dividing the total acquisition costs by the number of new customers acquired during a specific period. Understanding CAC helps businesses evaluate the efficiency of their marketing strategies and optimize spending.

How to Calculate CAC

• Total Acquisition Costs: Includes all marketing and sales expenses incurred to attract customers.
• Number of New Customers: The total number of customers acquired during the measurement period.
• Formula: CAC = Total Acquisition Costs / Number of New Customers.

Related Terms and Concepts

Customer retention, lifetime value (LTV), return on investment (ROI), marketing efficiency.