Customer Acquisition Cost

Definition:

Customer acquisition cost is the total expense incurred by a business to acquire a new customer, including marketing and sales expenses.

Key Elements:

Cost Calculation: Total marketing and sales costs divided by the number of new customers acquired.

Performance Indicator: Used to evaluate the effectiveness of marketing strategies.

Budgeting Tool: Helps allocate resources effectively for customer acquisition efforts.

Why Customer Acquisition Cost Matters:

Understanding CAC is crucial for evaluating the profitability of marketing campaigns and ensuring sustainable business growth.

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