The customer acquisition cost, or CAC, is the cost of all activities related to convincing a customer to purchase goods or services from a business for the first time. The CAC is generally computed in the aggregate, meaning the average cost of acquiring new customers within a given period of time. By itself, the CAC can be a useful measure for comparing different types of sales and marketing activities that lead to new customers. However, the CAC is perhaps most useful when used in conjunction with other metrics such as the CLV. See the Calculating the customer lifetime value recipe in this chapter.
This recipe provides an example of calculating the CAC for marketing campaigns as well as the total cost of acquiring new customers within a specific range of time.
