submit query
Loader

Please fill with your details

  • # #
Glossary

What is Customer Acquisition Cost?

A business's Customer Acquisition Cost, or CAC, is how much it spends to bring in new clients. The CAC is an important business metric that measures the cost of sales and marketing activities, as well as equipment needed to entice customers.


It is typical to analyze CAC along with Lifetime Value (an estimation of the amount of revenue an account will bring in throughout its lifetime by continuing to buy or subscribe for a longer period) or Monthly Recurring Revenue (the measurement of revenue generation by month) to ascertain whether or not a company is operating efficiently.

What role does CAC play in product management?


Customer acquisition cost helps a business determine the whole value of a customer to the business. It helps with overall ROI calculations for purchases as well.

How is CAC determined?


To calculate CAC, divide the entire cost of customer acquisition (cost of sales and marketing) by the total number of customers gained during a certain period. There are two distinct types of CAC calculations: simple and complex.

Here is an easy method to determine CAC: CaC = MCC/CA

MCC: Total costs associated with acquisition-related marketing campaigns


CA: Total new clients attracted

The challenging method for calculating CAC is as follows: CAC = (MCC + W + S + PS + O) /CAC 

MCC: Total acquisition-related marketing campaign expenditures


W: Wages related to marketing and sales


S: The total cost of marketing and sales software.


PS: Any additional professional services employed in marketing/sales (e.g., consultants).


O: Overhead


CA: Total number of clients acquired

Ways to Reduce CAC


Here are three client-focused techniques for reducing client acquisition expenses and raising profits:


  • Recognize your customers. You may create a product that your clients will adore by being aware of their needs and wants.


  • Engage customers as quickly as you can. Early product participation lowers the cost of client acquisition.


  • Keep bringing them back. Since it costs far more to gain a new user than it does to keep an existing one, provides a positive user experience.

Contact Us

Enter the details & we will contact you shortly!

Resource Library

An insight into Call Center Outsourcing

Global enterprises strive to attain service excellence so that they can stay ahead in a competitive environment.

Download Now >

BSNL Augmented Business Performances with Go4customer

TBharat Sanchar Nigam Limited (BSNL) started its operation and installed Quality Telecom in the nation.

Click here to Read >

Getit infomedia optimized business performance with Go4customer.com

GetIt Infomedia is a leading digital supermarket in India

Click here to Read >

Blogs

Top 10 BPO Companies in Gurgaon

<p>Gurgaon is one of the booming industrial cities in the National Capital Region (NCR) of Delhi that has become an ideal outsourcing city for BPO. Gurgaon has become the dreamland for j....

Read more>>

How to Train Your Team for Exceptional Inbound Customer Service?

In todays business environment, quality customer service for a company clients is a key component for repeat business. Delivering exceptional support experiences does matter a lot for business as this....

Read more>>

Our Esteemed Clientele

  • MSME logo
  • Manrega logo
  • GIL Company logo
  • BSNL Company logo
  • NMEICT Company logo
  • hudco Company hudco
  • Relaxo Comapany logo
  • NSEZ Company logo
  • Gail logo
  • MTNL logo
  • timex logo
  • BPCL Company logo
  • HPCL Company logo
  • IOCL Company logo
  • one97 logo
  • AIIMS Company logo
  • Power-Grid logo

Next-gen Call Center Outsourcing at your disposal

We make call center outsourcing a viable choice for businesses to achieve growth. We deliver best call center services by maintaining high training standards, integrating AI and data driven technology and offering 360° customer support. With us, you invest in customer relations built on trust and exceptional experience.