What is CAC?
Definition and meaning of CAC:
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CAC (cost per acquisition) is the cost of acquiring a customer or user. It’s calculated by taking the total cost of acquisition divided by the number of customers or users you receive.
CAC can help evaluate the value you get from customers and users who have signed up for your product. It can also be used to evaluate the effectiveness of your marketing campaigns and sales efforts.
How to calculate CAC?
There are several ways to calculate CAC:
- The common way to calculate CAC is based on how many customers you sign up for in a given period of time. For example, if you sign up 10 new customers in one month, your CAC for that month would be 10/100 = 1%.
- Another way to calculate CAC is based on the total amount paid for acquiring each customer, such as a one-time fee or subscription fee, or a recurring fee, such as a monthly subscription fee.
- A third way to calculate CAC is based on the total amount paid for acquiring each customer, regardless of how long they remain with you. For example, if you pay $100 per month for a recurring monthly subscription fee, then your CAC for that month would be ($100 + $100 + $100) / 3 = $0.67.
