logo aftership

Pricing

Customer Acquisition Cost (CAC)

CAC measures the amount of money that a company spends on marketing and sales activities in order to acquire new customers.

This metric is important for companies to track because it can give insights into how efficient their marketing and sales activities are in terms of generating new business. CAC can also help companies assess whether their customer acquisition strategies are sustainable in the long term.

Why is CAC important?

If a company's CAC is high, it may mean that its marketing and sales activities are not very effective in terms of generating new business. On the other hand, if a company's CAC is low, it may mean that its marketing and sales activities are more effective.

CAC is also important because it can help companies assess whether their customer acquisition strategies are sustainable in the long term. If a company's CAC is too high, it may not be able to continue acquiring new customers at the same rate. This could eventually lead to the company's downfall.

How to calculate CAC

There are a few different ways to calculate CAC, but the most common method is to divide a company's total marketing and sales expenses by the number of new customers acquired during a certain period of time.

For example, if a company spends $100,000 on marketing and sales activities in one month and acquires 100 new customers in that same month, its CAC would be $1,000.

Subscribe the updates