CUSTOMER ACQUISITION COSTS

Customer Acquisition Cost (CAC) is the cost associated in convincing a customer to buy a product/service.

This cost is incurred by the organisation to convince a potential customer. This is an important business metric. It plays a major role in calculating the value of the customer to the company and the resulting return on investment (ROI) of acquisition.

The calculation of customer valuation helps a company decide how much of its resources can be profitably spent on a particular customer. In general terms, it helps to decide the worth of the customer to the company.