Customer Acquisition Cost = sales costs + marketing costs / # of new customers acquired
Customer Acquisition Strategies - CAC formula from Close
Here’s what CAC might look like for a startup for one quarter based on these KPIs:
Sales costs: $200k
Marketing costs: $150k
Customer acquisition cost = ($200,000 + $150,000) / 1,000 = $350,000 / 1,000 = $350
There are two approaches you can take to calculate your customer acquisition costs.
First, you can take into account all of your expenses that relate to marketing and sales, including salaries for your sales team, marketing consultant fees, creative costs, trade show fees, and sales and marketing software.
This is the true total cost of customer acquisition, a namibia telegram data big-picture overview you can consider when assessing your company’s profitability, fundraising goals, hiring plans, and other strategic moves.
Alternatively, you can focus on specific campaigns and channels and calculate their CAC to compare the results they give you. For example, you can calculate CAC for LinkedIn ads, Google ads, and Facebook ads by only taking into account their respective expenses, like ad costs and consultant fees, to learn which marketing campaign is the most cost-effective for your business.
Customer Acquisition vs. Plain Old Marketing: What’s the Difference?
“Sooo uhhh isn’t customer acquisition just a fancy word for marketing?” I hear you thinking.
The answer is yes and no. Marketing can have quite a few different goals, from driving brand awareness through social media reach and organic website traffic to generating loyalty and referrals using email automation. It touches the entire customer journey. Marketing efforts can generate press coverage, attract investors, and position you as the go-to product for your buyer persona or your ideal customer profile.