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The Customer Acquisition Cost (CAC) measures how much a company spends to obtain new, additional customers. Oftentimes, this calculation is used with the customer lifetime value (LTV) metric, that also projects the customer’s profitability to calculate the newly acquired customer’s value. It’s primarily used to measure a business’ sales and marketing departments to figure out their profitability, profit margin and return on investment figures. How to Calculate CAC = Sales and Marketing Expense / Number of New Customers Examples of the expenses include product and service promotion expenditures, special compensation and commissions, regular wage payments, and operating expenses. The tally of newly acquired customers isRead More →