customer-acquisition-cost

Vocabulary Word

Definition

In business, 'Customer Acquisition Cost' (CAC) is the sum of all the money you spend on sales and marketing to gain a new customer. It’s a way to measure how much you're investing to grow your customer base.

Examples in Different Contexts

In the advertising industry, innovative campaigns can reduce 'customer-acquisition-cost'. An agency head might suggest, 'Using viral content can drive down our CAC while boosting brand awareness.'

Practice Scenarios

Impact

Scenario:

The enhanced features of our app are attracting new users. We need to quantify this growth to understand its effects on our sustainability plan.

Response:

Absolutely, let's measure our customer acquisition cost to understand the financial impact of this growth on our sustainability.

Tech

Scenario:

The new software update seems to be driving more users to our premium subscription, which could lead to increased revenue.

Response:

Then we should compare the revenue from the new premium subscriptions to the customer acquisition cost. This way we can ensure if the update was financially beneficial.