Customer Acquisition Cost (CAC) is the total cost incurred to acquire a new customer, expressed as the sum of all sales and marketing expenses related to acquiring new customers.
Why CAC is an important Metric?
Customer Acquisition Cost (CAC) is an important metric that measures the amount of money it costs to acquire each new customer. Companies must track their CAC to ensure their marketing efforts are effective and make a sound return on investment.
The higher the CAC, the more expensive it is for businesses to acquire customers, which can eventually lead to financial losses.