Customer Acquisition Cost (CAC)

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