What is CAC and how to optimize it?

CAC (Customer Acquisition Cost) is the cost of acquiring a new customer. It is calculated as the sum of all marketing and sales expenses divided by the number of new customers over a specific period.

Optimizing CAC is important for improving unit economics and increasing business profitability.

Methods of optimizing CAC:

• Enhancing marketing effectiveness: using more targeted channels, improving the quality of advertising campaigns.
• Automation and optimization of sales processes: reducing time and resources for lead conversion.
• Improving website or product conversion: interface convenience, relevant content, A/B testing.
• Using referral programs: attracting customers through recommendations reduces costs.
• Audience analysis and segmentation: focusing on the most profitable and loyal segments.

Example formula:

CAC = (Marketing expenses + Sales expenses) / Number of new customers

Continuous monitoring and analysis of CAC helps in making informed decisions and directing resources to the most effective channels.