What does Customer Acquisition Cost mean to you?

Your Customer Acquisition Cost, or CAC, is the total cost spent on acquiring new customers (marketing/sales expense) divided by the number of new customers acquired during that particular period.

If you invested $1000 in marketing/sales in a one month period and acquired 10 new customers as a direct result of that marketing and promotion, then your acquisition cost is $100 per new client.

All successful businesses measure their acquisition costs. Luckily, most promotional activity on the web can be measured very accurately.

If you are looking to succeed and make a profit, you must make sure that the pricing of your products and services covers your CAC.

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