CAC

What is CAC?

The customer acquisition cost (CAC) is an important metric that measures the total expense involved in acquiring a new customer. This includes various costs such as advertising, marketing campaigns, sales efforts, and any other expenses incurred to convert a potential lead into a paying customer. To calculate CAC, you divide the total costs associated with acquiring new customers by the number of customers acquired during a specific period. Understanding CAC is vital for businesses, as it helps assess the effectiveness of marketing strategies and determine whether the costs align with the revenue generated from new customers. By monitoring CAC, companies can make informed decisions to optimize their customer acquisition efforts.