Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is the total expense a business incurs to attract and convince a new customer to buy its product or service. This includes marketing, advertising, sales efforts, and any other costs directly related to gaining new customers. Understanding CAC helps businesses evaluate the efficiency of their marketing strategies and determine how much they need to spend to grow their customer base profitably. It’s a vital metric for measuring the cost-effectiveness of efforts to expand the business and ensuring that the revenue generated from new customers exceeds the acquisition costs.