Customer Acquisition Cost (CAC)

Customer acquisition cost, or CAC, estimates how much a business spends to win a new customer during a defined period. A basic calculation divides relevant sales and marketing acquisition costs by the number of new customers gained in that period. The result changes depending on which costs are included, whether labor is counted, and how a new customer is defined. For a landscaping company, an inquiry from a website is not automatically a new paying customer. CAC helps compare acquisition efforts when definitions are consistent, but it is not the same as cost per lead or the price of running one advertisement. Seasonal timing and repeat business can also affect how useful the number is.