What is Customer acquisition cost (CAC)?
Customer Acquisition Cost (CAC): The cost associated in convincing a customer to buy a product/service, encompassing the resources and costs incurred to acquire a new customer.
Customer Acquisition Cost (CAC): The cost associated in convincing a customer to buy a product/service, encompassing the resources and costs incurred to acquire a new customer.
Introduction: Customer Acquisition Cost (CAC) quantifies the total average cost your business incurs to acquire a new customer, including all marketing and sales expenses. A critical metric for assessing the efficiency of marketing strategies and the sustainability of growth, CAC is pivotal for businesses aiming to optimize their marketing investments and improve profitability. Understanding and managing CAC is essential for startups, e-commerce platforms, and established businesses alike, especially in competitive digital marketplaces where customer acquisition strategies significantly impact the bottom line.
Calculating CAC:
CAC=Total Marketing and Sales Costs / Number of New Customers Acquired
Strategies for Reducing CAC:
Importance of Monitoring CAC: