Customer Acquisition Cost (CAC) measures the total cost of acquiring a new customer, including all marketing and sales expenses. It helps businesses understand how efficiently they are converting spend into actual customers.
Calculation: CAC = Total Sales & Marketing Costs ÷ Number of New Customers Acquired
Example: A brand spends $10,000 on marketing and sales efforts in one month and gains 200 new customers. The CAC is $50.
