Understanding Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is a crucial business metric that measures the cost of acquiring a new customer. This includes all marketing and sales expenses over a specific period, divided by the number of new customers acquired during the same timeframe. A lower CAC is indicative of an efficient acquisition process.

For instance, if your business spent $5,000 in marketing and gained 250 new customers, your CAC would be $20 per customer. This metric allows businesses to optimize marketing channels, scale growth, and calculate ROI more precisely.

Monitoring CAC consistently helps determine profitability, identify budget inefficiencies, and forecast scalability. For SaaS, eCommerce, and service-based industries, CAC plays a vital role in aligning strategies with CLTV (Customer Lifetime Value).

Use this tool to calculate your CAC and make data-driven decisions that enhance your growth trajectory and reduce acquisition costs over time.