Customer Acquisition Cost

What is Customer Acquisition Cost?

The cost required to convert a potential lead into a paying customer. The lesser your CAC is in the long run, the more profits you can make.

How to Calculate CAC?

Customer Acquisition Cost = Cost of Sales/Marketing Efforts (divided by) Number of New Paying/Acquired Customers.

Importance of this metric -

  • Customer acquisition is a long,tedious process of an organization.

  • But slowly,Under a good acquisition strategy, word spreads and more leads come at your door.

  • Ultimately, CAC helps where your marketing/sales strategies are effective or not.