What is CAC?
CAC definition: CAC is an acronym of Customer Acquisition Cost; it refers to the amount of money needed to acquire a new customer through sales and marketing in a specific time period.
CAC is calculated using a number of factors including that contribute to the cost of marketing, advertising, and eventual sale of a product.
These factors include:
- Marketing spend
- Advertising spend
- Staff salaries
- Staff bonuses
- Content creation costs
- Affiliate commissions
For example:
- LG spend $100,000 on advertising a new Smart TV in Q1.
- They acquired 100 customers
- Their CAC is $1,000
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Additional resources about CAC
- Customer Acquisition Cost: The Secret Weapon of Successful Startups
- Customer Acquisition Cost: The One Metric That Can Determine Your Company’s Fate
- What is customer acquisition cost and why does it matter?
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