Customer acquisition cost (CAC)

Customer acquisition cost shows how much money a company spends to gain a new customer, which helps determine the return on investment of its customer acquisition efforts. CAC includes a company’s spending on marketing and advertising, employee salaries, tools, and technology, as well as sales, travel expenses, etc. This metric is calculated by adding up all marketing and sales expenses, then dividing the result by the number of new customers gained during a specific period.

CAC helps improve your marketing and sales efforts, allows you to analyze your sales journey further to determine your budget, and provides valuable insight into potential inefficiencies within your sales funnel.