What is Customer Acquisition Cost (CAC)?
Customer Acquisition Cost, or CAC, is the total amount of money a business spends to get a new customer. To calculate it, you add up all your sales and marketing costs over a certain period and divide that by the number of new customers you gained in that same period. This metric is super important because it helps you understand if your business model is sustainable. If your CAC is higher than the amount of money you make from that customer, you have a problem. The goal is to keep your CAC as low as possible.