Customer Acquisition Costs Will Make or Break Your Business

Customer acquisition cost (CAC) is the measure or effectiveness of your marketing and advertising campaign.

Just looking the words, CAC is the number of dollars spent to add one paying customer.

• If $2,000 in marketing expenses generated 10 new customers, the CAC is $200.
• If $2,000 in marketing expenses generated 20 new customers, the CAC is $100.

The next step is to calculate what revenues were generated from the 10 or 20 new customers.

If $50,000 in new revenue was generated by spending $2,000, the figure would be 25. Or, for every $1 marketing dollar spent, the business made $25.00. So, there are two ways of tracking marketing investments.