Customer acquisition cost (CAC) refers to the total amount of money a business spends on marketing and sales efforts in order to acquire a new customer. It includes all expenses associated with attracting, engaging, and converting potential customers into paying customers. CAC is calculated by dividing the total marketing and sales expenses by the number of new customers acquired within a specific period. This metric helps businesses evaluate the effectiveness and efficiency of their marketing strategies and determine the profitability of acquiring new customers.
