Customer Acquisition Cost (CAC)

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Did you know? Across many industries, the average startup CAC is about $225 per new customer

1. What is Customer Acquisition Cost (CAC)?

Customer Acquisition Cost (CAC) refers to the total expenses a business incurs to acquire a new customer. It includes all sales and marketing expenses, such as advertising, salaries, software, and content creation, divided by the number of new customers gained in a specific period.

For example, if your company spent $50,000 on marketing and gained 500 new customers, your CAC would be $100.

Platforms like Convin help reduce CAC by automating outreach, improving sales coaching, and increasing conversion rates.

2. How is CAC Calculated?

The basic CAC formula is:

CAC = Total Sales & Marketing Cost / Number of New Customers Acquired

Include costs like:

• Paid ads and media
• Marketing software and tools
• Sales team salaries and commissions
• Content and creative production
• CRM and communication platforms
  
  

Tracking CAC over time enables companies to optimize their customer acquisition strategies and measure their return on investment (ROI).

3. What is the Difference Between CAC and CPA?

While both CAC and CPA (Cost Per Acquisition) measure acquisition cost, they serve different goals:

CPA is often used in ad campaigns, while CAC is broader and includes all resources spent on acquiring a long-term customer.

Build a leaner lead gen system with Convin's AI.