Customer Acquisition Cost (CAC)

• Fundamental
• Metric
• Marketing

The total cost of acquiring a new customer, including all marketing and sales expenses.

Problem it addresses

Businesses need to understand the cost-effectiveness of their marketing strategies. Without knowing the cost to acquire a new customer, companies cannot accurately measure return on investment (ROI) for their marketing efforts, leading to potentially wasteful spending and inefficient allocation of resources.

How it helps

CAC calculation helps businesses determine the financial value of acquiring new customers and assess the efficiency of their marketing strategies. By understanding CAC, companies can make informed decisions about how much money to invest in customer acquisition, optimize marketing strategies to reduce costs, and improve overall profitability.