CAC (Customer Acquisition Cost)
The total cost of winning a customer to purchase a product or service.
Customer Acquisition Cost (CAC) is the “north star” metric for growth. It is calculated by dividing your total marketing/sales spend by the number of new customers acquired.
The Formula
$$ \text{CAC} = \frac{\text{Total Marketing Spend}}{\text{New Customers Acquired}} $$
How High-Performance Websites Lower CAC
- Higher Conversion Rate: If your site converts at 2% instead of 1%, your CAC effectively drops by 50%.
- Better Quality Leads: Filtering out “tire kickers” saves your sales team time, reducing labor costs.
Lowering your CAC is the fastest way to increase profitability and scale your ads. Use our ROI Calculator to see the impact.
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Related Concepts
CRO (Conversion Rate Optimization)
The systematic process of increasing the percentage of website visitors who take a desired action.
MQL (Marketing Qualified Lead)
A lead who has indicated interest in what a brand has to offer based on marketing efforts or is more likely to become a customer than other leads.
A/B Testing
A method of comparing two versions of a webpage against each other to determine which one performs better.