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Customer Acquisition Cost
Business
WHAT IS IT?
Customer Acquisition Cost is the average cost associated with acquiring a new customer.
IN PLAIN ENGLISH
It is the approximate marketing and sales cost needed to generate a new customer.
SIMPLE EXAMPLE
If you spend £1,000 and acquire 20 new customers, the simple acquisition cost is £50 per customer.
WHY DOES IT MATTER
CAC needs to be considered alongside customer value, gross margin and repeat business rather than sales revenue alone.
THE ROCKET TEST
CAC is what it costs, on average, to acquire a new customer.
SEE IT IN ACTION
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