Customer acquisition costs (CAC) refer to the costs associated with convincing a potential customer to purchase a product or service.
These costs can include advertising, marketing, sales, and other expenses associated with acquiring new customers.
CAC is an important metric for businesses to track, as it can help them understand the effectiveness of their customer acquisition strategies and the overall profitability of their business.
CAC can be calculated by dividing the total cost of acquiring new customers by the number of customers acquired.
This metric can be used to compare the cost of acquiring customers across different channels, such as online advertising, direct mail, or referrals.
It can also be used to compare the cost of acquiring customers over time, to measure the effectiveness of changes in customer acquisition strategies.
By tracking CAC, businesses can identify areas where they can reduce costs and increase the efficiency of their customer acquisition efforts.
This can help them maximize their return on investment and ensure that their customer acquisition strategies are profitable.