How do I calculate customer acquisition cost?

How do I calculate customer acquisition cost?

To calculate customer acquisition cost (CAC), divide your total marketing and sales expenses by the number of new customers acquired.

What expenses should I include in the calculation?

Include all marketing expenses, sales team salaries, software costs, and any other costs directly related to acquiring customers.

Can you give me an example calculation?

Sure! If you spent $10,000 on marketing and acquired 100 new customers, your CAC would be $10,000 / 100 = $100.

Is a lower CAC always better?

Not necessarily. A lower CAC is good, but it should be considered alongside customer lifetime value (CLV) to assess profitability.