Customer acquisition cost (CAC)

Customer acquisition cost (CAC) is a key metric used to measure the cost-effectiveness of a company’s marketing and sales efforts. By calculating the total cost of acquiring a new customer, businesses can determine how much they are spending to acquire each customer and adjust their marketing strategy accordingly. CAC includes all costs associated with acquiring a customer, such as advertising, marketing, and sales expenses. It is calculated by dividing the total cost of acquisition by the number of new customers acquired within a specified time frame. By tracking CAC over time, businesses can identify trends and adjust their marketing strategy to reduce costs and improve profitability. A lower CAC indicates a more efficient marketing strategy and can lead to increased profits and growth.

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