Customer Acquisition Cost is the set of investments made to convince a prospect to become a customer.
How to calculate Customer Acquisition Cost?
By defining a specific period for analysis, such as a certain month or year, the CAC can be calculat in a simple way:
Marketing, sales, research, all these expenses are add up in this calculation. To give you a clearer idea, in an agency we could list the following expenses:
Hours of a manager in negotiation and initial meetings.
Gasoline and vehicle depreciation.
Hours of an analyst making diagnosis.
Telephone costs.
Hours of a salesperson at fusion database closing (or a manager in the role of a salesperson).
Structure cost.
Sponsor link campaigns.
Participation in associations, fairs and events for prospecting.
In short, everything that is done to attract a new business. But this measurement only makes sense if it is relat to some others, and I am going to prioritize two: Lifetime Value and ROI – Return on Investment .
Customer Acquisition Cost Examples
To make sure you have a good understanding of what CAC is and how to calculate it, let’s look at this example of Customer Acquisition Cost. Take a look at how a sports products e-commerce site calculates its Customer Acquisition Cost:
1. Calculating the cost of the campaign
The first thing you ne to do is find out the amounts that the price also has a number of variables: make up the marketing and sales costs. Since this is e-commerce, the expenses incurr are as follows:
Marketing team member salaries : They are the ones who study the leads and are in charge of creating strategies to capture them. If this team is made up of 2 people and each receives a monthly salary of $1,500, the total would be $3,000.
Paying for an SEO specialist
To achieve an organic positioning of the website and fans data attract clients, someone specializ in SEO is requir to create a positioning plan that yields results. The investment for the hiring was $1,700 per month.
Digital advertising : the e-commerce decid to use paid mia to reach its leads. Between the advertising budget and the hiring of the SEM specialist, $3,500 was invest per month.
If we add up each amount, the total is $9,200 per month. This would be the cost of the campaign.