CAC (Customer Acquisition Cost)
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PPC and SEO MarketingHow to calculate CAC?
Formula: CAC = (All Marketing Costs + All Sales Costs) / Number of New Customers
Example: In one month, you spent $2,000 on Facebook advertising. You paid $1000 to the marketer and $1000 to the sales manager. Total costs: $4,000. You got 40 new customers this month. CAC = 4000 / 40 = $100. It costs you $100 to attract one client.
CAC vs CPA
CPA (Cost Per Action) is the cost of a specific action, for example, an application on the site (a lead). But not every lead becomes a customer. If you get 10 leads at $10 (CPA = $10), but only one of them buys, your CAC is $100.
How to reduce CAC?
If, with the same traffic budget, your site starts converting 2% of visitors to applications instead of 1%, your CAC will drop in half.
The use of AI agents for the initial processing of leads reduces the burden on the sales department, allowing you to save on salaries (reduces the numerator in the formula).
/ FAQ
A high CAC is not bad if you have a high LTV. If you sell enterprise software for $100,000 per year, then spending $5,000 (CAC) to attract such a client is a great investment.
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