Customer Acquisition Cost (“CAC”)

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What It Means

Customer Acquisition Cost, or CAC, refers to the average sales and marketing cost required to attract a new customer.

Why It’s Important

CAC is a key success factor for many businesses because it provides a metric to compare against the expected value of a customer relationship. The higher the cost to acquire a new customer, the more revenue and gross margins you need from each customer for the company to be profitable.

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