What is Customer Acquisition Cost (CAC)?

Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer, including all marketing, advertising, and sales expenses divided by the number of new customers acquired in a specific period. It helps measure marketing efficiency.

When to track Customer Acquisition Cost?

CAC should be tracked continuously across different channels, campaigns, and time periods. It's especially important when scaling marketing efforts, evaluating channel performance, or making budget allocation decisions.

When might CAC be misleading?

CAC can be misleading if attribution is inaccurate, if it doesn't account for organic acquisition, if calculated over inappropriate time periods, or if it doesn't consider the quality and lifetime value of acquired customers.

What is the importance of Customer Acquisition Cost in Analytics?

CAC enables ROI calculation for marketing activities, helps optimize marketing channel mix, guides budget allocation decisions, and when compared with LTV, indicates the long-term viability of customer acquisition strategies.