What is CAC (Customer Acquisition Cost)?
CAC (Customer Acquisition Cost) is the total expense required to acquire a new customer. It includes costs from marketing, sales, advertising, and related efforts, divided by the number of customers gained over a specific period.
Table of Contents
Full Definition
CAC is crucial for understanding the efficiency of your sales and marketing investments.
It must be balanced against customer lifetime value to ensure profitability.
Lowering CAC while maintaining quality leads is a common growth goal.
Examples
Measures cost efficiency
Informs budget allocation
Supports profitability analysis
Benefits
Can be misleading if indirect costs are excluded
Does not account for customer quality
Requires regular review and update
Common Mistakes
Optimize marketing and sales channels to reduce CAC.
Conclusion
Optimize marketing and sales channels to reduce CAC.