CAC (Customer Acquisition Cost) Calculator

What is CAC?

CAC (Customer Acquisition Cost) is a metric used by businesses to measure how much it costs to acquire a new customer. It helps businesses assess the effectiveness of their marketing and sales strategies.

Formula

The formula for calculating CAC is:

CAC = Total Cost / Total Customers Acquired

Why is CAC Important?

CAC helps businesses understand the cost of acquiring new customers, which directly affects profitability. If CAC is too high, the business may be spending too much to grow its customer base, reducing overall margins.

Ways to Improve CAC

• Optimize Marketing Spend: Focus marketing efforts on more cost-effective channels to reduce spending per acquired customer.
• Improve Conversion Rates: Enhancing conversion rates can lead to more customers for the same cost, lowering CAC.
• Leverage Customer Referrals: Referrals often have lower acquisition costs compared to traditional marketing.

Understanding and optimizing CAC is key to building a sustainable, profitable business.

Learn more about marketing metrics