How to Calculate Customer Acquisition Cost
CAC measures how much sales and marketing spending is required to acquire a new customer.
Basic formula
Divide eligible sales and marketing spending by the number of new customers acquired in the same measurement period.
What to include
Be consistent about whether you include salaries, agency fees, software, media spend and commissions.
Common mistake
Comparing CAC from one channel with fully loaded CAC from another can create a misleading conclusion.
Practical takeaway
Use the metric that matches the business question you are trying to answer. When several metrics describe different stages of the same workflow, compare them together rather than optimizing one in isolation.
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