CAC

Definition

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer. It measures how much your company spends to attract new customers and includes all expenses related to customer acquisition, such as marketing costs, software, salaries, overheads, and more.

Why It’s Important

Understanding your CAC is essential for running a profitable business. It helps you:

  • Evaluate profitability: Compare the costs of acquiring customers with the revenue they generate.
  • Optimize marketing efforts: Adjust campaigns and strategies to lower costs and increase returns.
  • Plan for growth: Use CAC to forecast revenue and set clear goals.
  • Attract investors: A low and sustainable CAC shows that your business is efficient and scalable.

Reducing CAC enables companies to use resources more effectively and maintain healthy collaboration between sales, marketing, and customer service teams.

How We Work with CAC

We help companies optimize the digital aspects of CAC, such as improving ad budgets, targeting the right audiences, and increasing conversion rates. While a full CAC calculation includes costs like salaries and rent, we focus on making the digital components as cost-effective as possible.

  • Data-driven strategies: We analyze and identify opportunities to reduce unnecessary costs.
  • Precision targeting: We ensure your ads reach the most relevant audiences.
  • Performance tracking: Measure, analyze, and optimize continuously to keep your CAC trending downward.

Want help improving your CAC?

Contact us and we’ll set up a meeting to talk more!
This is an entry in the Growth Hackers glossary, where you will find our definitions of terms that may be good to know.