Glossary
Customer acquisition cost (CAC)
How much it costs to achieve one new customer
Your customer acquisition cost (CAC) is the total cost required to achieve one new customer.
CAC is determined by adding cost of sales to cost of marketing and dividing by the number of new customers acquired.
Companies with a high CAC have an uphill battle talking new leads into subscribing to their product or making a purchase. On the contrary, companies with a high net promoter score (NPS)- which measures customer loyalty as a result of how likely customers are to recommend your company to a friend- have an easier path and, generally, a lower CAC.
CAC is determined by adding cost of sales to cost of marketing and dividing by the number of new customers acquired.
Companies with a high CAC have an uphill battle talking new leads into subscribing to their product or making a purchase. On the contrary, companies with a high net promoter score (NPS)- which measures customer loyalty as a result of how likely customers are to recommend your company to a friend- have an easier path and, generally, a lower CAC.