What is customer acquisition cost?
The customer acquisition cost (CAC) is the total amount to acquire a new customer for your business. It includes the cost of your marketing campaigns and other marketing expenses that you have to spend in order to get a new average customer. This important business metric is particularly useful when compared with your customer lifetime value (LTV) or your return on investment to know if you spend too much (or too little) on your marketing efforts. This can also help you with various decision-making.