Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the total expense a business spends to attract and gain a new customer. This includes marketing, advertising, sales team salaries, and any other related costs divided by the number of customers acquired in a specific period. For example, if a company spends $10,000 on marketing and sales to gain 50 new customers, the CAC is $200 per customer. Understanding CAC helps businesses evaluate the efficiency of their marketing efforts and ensures that the cost of acquiring customers is sustainable relative to the revenue they generate.