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.