CAC

What The Hell is CAC?

CAC stands for Customer Acquisition Cost Customer Acquisition Cost = The total amount of money spent on marketing and sales to get one new paying customer.

It simply tells you how much cash it takes to convince someone to actually buy your product.

If your CAC is higher than the profit you make from that customer, your business will eventually bleed out and die.

Real World Example & Calculation :
-> Imagine you sell protein powder online and run Instagram ads.
-> Total spent on Ads Marketing Spend = All money put into promotions and ads: ₹10,000
-> Total new customers who bought your powder from those ads: 50
-> CAC = (₹10,000 / 50) = ₹200
-> This means you spent exactly ₹200 to acquire one single customer!

✍🏻 Mantra Joshi

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