Customer Acquisition Cost: what it is and how to calculate C
Feb 22, 2024 0:31:15 GMT -6
Post by asadul5585 on Feb 22, 2024 0:31:15 GMT -6
Customer Acquisition Cost (CAC) is a metric used by a company's marketing and sales department to measure whether investments and efforts to convert a “potential customer” into a “paying customer” are being profitable. The indicator is important to check whether the company's advertising actions and service standards are yielding results, in addition to reducing costs or changing strategy if necessary, as investments made in the area should attract customers and improve the company's numbers. Otherwise, efforts aimed at attracting new consumers become a financial bottleneck for the enterprise, slowing down the performance of the business as a whole while potentially causing more serious problems for management. Therefore, in this article, you will find out what costs are included in the calculation of this indicator, in addition to learning how to calculate your company's CAC and how to reduce it if necessary.
Let's go together? What is Customer Acquisition Cost? CAC is an indicator used to measure how much a company spends to acquire a customer. This calculation is made by the marketing, sales and other departments that work directly on attracting consumers. Therefore, the Customer Acquisition Cost is the result of the total amount invested in the areas that work directly in attracting and capturing consumers, divided by the number of customers acquired in that given Kuwait Mobile Number List period of time. What are the costs that are part of the CAC? The CAC is basically made up of all the costs included in marketing and sales, which you can see below. Marketing Consider investments with: salary; tools; investments in paid media, such as advertising purchases; public relations; events; It is digital and print marketing. Sales Place on the tip of the pencil: salary; commissions; trainings; telephony; trips; It is infrastructure used for customer conversion.
Noted? Then we can move on! What are the costs that are not part of the CAC? Departments that do not work directly with attracting and capturing new customers should not be part of the CAC calculation, as is the case with the Human Resources, administrative, support, product and management sectors. How to calculate Customer Acquisition Cost? Finding out your company's CAC is very simple, check it out: Start by defining the period you want to calculate (in general, this indicator is measured monthly or quarterly). Make a list of all marketing and sales expenses within this period. Identify the total number of customers converted within the established time frame. Add up all expenses and divide the result by the number of customers acquired. Ready: you have the CAC for the analyzed period in your hands. The calculation formula looks like this: CAC = (sales cost + marketing cost) ÷ new customers acquired Fictional example Within a month, a language school invested around R$10,000 to publicize its courses and sell its plans. During the same period, it acquired 20 new students, converted directly by investments made in marketing and sales.
Let's go together? What is Customer Acquisition Cost? CAC is an indicator used to measure how much a company spends to acquire a customer. This calculation is made by the marketing, sales and other departments that work directly on attracting consumers. Therefore, the Customer Acquisition Cost is the result of the total amount invested in the areas that work directly in attracting and capturing consumers, divided by the number of customers acquired in that given Kuwait Mobile Number List period of time. What are the costs that are part of the CAC? The CAC is basically made up of all the costs included in marketing and sales, which you can see below. Marketing Consider investments with: salary; tools; investments in paid media, such as advertising purchases; public relations; events; It is digital and print marketing. Sales Place on the tip of the pencil: salary; commissions; trainings; telephony; trips; It is infrastructure used for customer conversion.
Noted? Then we can move on! What are the costs that are not part of the CAC? Departments that do not work directly with attracting and capturing new customers should not be part of the CAC calculation, as is the case with the Human Resources, administrative, support, product and management sectors. How to calculate Customer Acquisition Cost? Finding out your company's CAC is very simple, check it out: Start by defining the period you want to calculate (in general, this indicator is measured monthly or quarterly). Make a list of all marketing and sales expenses within this period. Identify the total number of customers converted within the established time frame. Add up all expenses and divide the result by the number of customers acquired. Ready: you have the CAC for the analyzed period in your hands. The calculation formula looks like this: CAC = (sales cost + marketing cost) ÷ new customers acquired Fictional example Within a month, a language school invested around R$10,000 to publicize its courses and sell its plans. During the same period, it acquired 20 new students, converted directly by investments made in marketing and sales.