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Customer acquisition cost

Also known as: CAC

Customer acquisition cost, or CAC, is the allocated sales and marketing cost of acquiring a new customer. Calculate it by dividing the chosen acquisition costs by new customers within an appropriate measurement scope; costs can include staff and other sales expenses as well as advertising.[1] Using ad spend alone therefore produces a narrower cost measure.

Do not confuse CAC with CPA for any conversion action: CPA may refer to a signup or a purchase by an existing customer.[2] A store should document how it identifies new customers and allocates shared channel costs. Compare CAC with margin-based customer value and consider when that value is earned. An inexpensive first order does not by itself establish profitable acquisition.

Content updated:

Sources

  1. Customer Acquisition Cost (CAC) - Definition, Formula, and Example
  2. Cost per action: Definition

Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.