How To Calculate Cost of Customer Acquisition
CAC is one of the most important figures to know for you business. It impacts your MSRP, wholesale pricing, sales channels, and overall business strategy. It answers one of the most important questions for your business. Are you going to make money? CAC = TMC/CA Where: CAC = Cost of customer acquisition TMC =Total marketing cost CA = Customers Aquired What to do with your CAC It is good to know what your CAC is for each sales channel. If you’re selling your product online you’ll likely have specific marketing costs associated that channel. You may have an ad spend budget for Facebook, Amazon, Adwords, Social, or other online channels. These links will drive traffic to your site where they will hopefully buy your product. These separate campaigns channels can all compliment each other as seeing an ad on one platform makes customers more likely to buy on another. You may also have retail channels that sell your product which will have a CAC as well. Your retail sales will likely require additional marketing and support to acquire each new customer.