What is CAC? Customer Acquisition Costs Explained for Beginners

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If you have your own business and you are driving customers, you need to know your CAC, aka your Customer Acquisition Cost. Customer Acquisition Cost is the average cost to drive new customers over a given time period. CAC takes into account the total expenditure on all Marketing, Advertising, and Sales for the period, which you then divide by the number of new customers for the period.

Customer Acquisition Costs:

Employee salaries & expenses
All Marketing expenses
All Sales Expenses
Paid Advertising expenses
Consulting expenses
Travel expenses

Customer Acquisition Costs Formula:

CAC = (Marketing + Sales + Advertising costs) / New Customers

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