Customer Acquisition Cost (CAC) is the total amount it costs to acquire a new customer. It includes all marketing, sales and service expenses associated with acquiring a new customer. CAC is a key metric in calculating the lifetime value of a customer.
To calculate CAC, add the Cost of Sales with the Cost of Marketing, and divide that number by the amount of New Customers Acquired.
CAC = (Cost of Sales + Cost of Marketing) / New Customers Acquired.
