Customer Acquisition Cost - Ritvvij Parrikh Customer Acquisition Cost | Ritvvij Parrikh Humane ClubMade in Humane Club

Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the price you pay on an average for Conversion, i.e., acquiring each customer. For example, even Google spent $14.4 billion in 2015 to acquire Paid or Acquired Traffic.

Why it matters:

How to calculate CAC? Establishing exact causality is very hard. To calculate CAC, total your entire marketing cost and divide it by the number of customers.

  • It is extremely easy to calculate the cost of Digital Advertisements or Paid or Acquired Traffic. It is calculated in the form of CPM, CPL, etc.
  • Calculate the cost of Referral Traffic by determining amount spent on PR, etc.
  • Calculate the cost of content marketing by determining the cost of creating Candid Communication and the cost of running your Owned Media.
  • Do you provide Discounts and Promotions? Then include those too.
  • If you distribute a physical product then include the cost of your distribution partners (wholesales and retailers) and the cost of repurchasing unsold inventory.
  • If you have a money-back policy, then include the rate of return too. Alternatively, do not classify customers as acquired till they qualify for money-back.
  • If you have a sales team, then include the cost of the sales team and sales commissions.



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