There are a myriad number of three-letter acronyms in the business and customer service world, so we’re defining one in under 100 words: CAC.
What Does CAC Stand For?
CAC stands for customer acquisition cost.
A company’s CAC is the total sales and marketing cost required to earn a new customer over a given time period. That time period could be a month, a quarter, or even a year.
The total sales and marketing cost includes all program and marketing spend, salaries, commissions, bonuses, and overhead associated with attracting new leads and converting them into customers.
If the sales and marketing teams spent $400,000 one quarter and acquired 40 new customers, the CAC would be $10,000:
$400,000/40 customers = $10,000/customer