With
44% of companies placing a focus on customer acquisition—in contrast to the 18% of companies placing customer retention as their focus—advertisers are looking for ways to cost-effectively attract new customers. However, customer acquisition can
cost up to 7 times more than selling to existing customers. To help brands understand how to accurately measure their customer acquisition cost and strategically implement a plan based off those metric insights, we laid out everything advertisers need to know about customer acquisition costs, specifically within affiliate marketing.
What is customer acquisition cost?
Customer acquisition cost (CAC) is a
metric used to assess the cost a business incurs to acquire a new customer. It’s typically expressed as an average, with the total marketing campaign spend divided by the total number of acquired customers to get the average cost per new customer. Businesses will often calculate CAC by marketing channel to compare acquisition costs of various channels.
Understanding CAC metrics
In a sense, CAC can be viewed as the all-in
cost per action (CPA) for your brand. It accounts for all marketing spend, as well as any additional costs your business incurs to acquire a new customer. These additional costs could be agency spend, employee salaries, gifting costs, technology stack, network costs, etc. It’s important to note that CAC should
not include sales tax. Before diving into best practices around using CAC, consider how you are using the term internally—it’s critical that you have alignment within all your marketing channels and partners on exactly which metrics you are including in you CAC calculations, as the exact inputs that are included in CAC can vary from business to business.
The graphic below includes an example of monthly costs that could be considered in CAC and a sample calculation: 
