Customer Acquisition Cost (CAC)
Measure to total amount of capital it costs to gain a new customer.
Overview
By adding up sales and marketing costs for a given period, and dividing them by the number of new customers for that period, this metric gives your team insight into how much it costs your company to acquire a new customer. CAC measurements can include varying variable and fixed costs, depending on the depth of insight you want on your acquisition costs. CAC metrics can also be determined on an individual account basis, by breaking down costs more granularly.
Formula
Total marketing spend on customer acquisition/Total new customers
Reporting frequency
Monthly
Example of KPI target
$142 per acquisition
Audience
Marketing Manager, Sales Manager
Variations
Average customer acquisition cost
Cost to acquire a new customer
