Customer Acquisition Cost (CAC)

Customer Acquisition Cost, CAC, refers to the cost of acquiring a new customer, which includes expenses such as advertising, sales commissions, and other marketing efforts.

Definition

Sum of all sales expenses (S_x) and marketing expenses (M_x) in the given time period (Δt) divided by the number of new customers (NC) acquired in that time period.

$CAC(\Delta t)={\frac {S_{x}+M_{x}}{N}}$

Details

Sales Expenses (S_x) include

• the wages all of the personnel in Sales, including commissions
• all expenses for tools uses by this personnel
• excluding company-wide tools like email, chat, data storage etc.

Marketing Expenses (M_x) include

• the wages all of the personnel in Marketing
• all expenses for tools uses by this personnel
• excluding company-wide tools like email, chat, data storage etc.
• including Ad Spend in the given time period Δt

Standardization Status

Request for Comments (RFC): 22/0101 - Customer Acquisition Cost (CAC)
Type: metric
Version: 0.9
Status:proposal

See also

• Customer Lifetime Value (CLV)
• CAC-LTV-Ratio

Sources

• What is Customer Acquisition Cost (CAC)? (productplan.com)