Meaning of CAC (Customer Acquisition Cost)

Simple definition

Customer Acquisition Cost (CAC) is the total cost a business spends to acquire a new customer. This includes marketing expenses, sales costs, and any other resources spent to bring in a customer.

How to use CAC (Customer Acquisition Cost) in a professional context

In digital marketing, CAC is an important metric used to evaluate the efficiency of marketing strategies and determine the profitability of acquiring new customers. Companies aim to lower their CAC to improve their return on investment (ROI) for marketing efforts.

Concrete example of CAC (Customer Acquisition Cost)

If a company spends $10,000 on advertising and marketing in a month and acquires 200 new customers, the CAC would be $50 ($10,000 ÷ 200 customers). This means it cost the company $50 for each new customer.