The customer acquisition cost (CAC) is the cost associated with acquiring a new customer. CAC is an important metric to measure as it will help you determine how to grow and maintain profitability.
Learn: What is Inbound Customer?
To arrive at your customer acquisition cost, divide the total marketing costs associated with acquiring new customers by the number of customers acquired during the period the money was spent.
Learn: Whait is Inbound Marketing?
Comparing your customer acquisition cost with your lifetime value of a customer (LTV), will show you which marketing campaigns or channels helped you obtain your highest value customers. If you find that a specific channel or campaign is consistently bringing in customers with higher LTVs, you can then rebalance your marketing spend to invest more heavily in the marketing efforts that deliver more valuable customers.