ECHO EMISSARY

Glossary

CAC (customer acquisition cost)

CAC (customer acquisition cost) is the full cost of acquiring one new paying client: advertising, sales team work and related expenses.

In plain words

Lead price shows what an application costs. CAC shows what a client who paid costs. Between the two lies the whole funnel: unanswered calls, refusals, abandoned chats and sales reps’ time.

How it is calculated

CAC = total acquisition costs for the period / number of new paying clients in the same period.

Costs include advertising, partner payouts, salaries and bonuses of sales reps working with new clients, telecom and tools.

A hypothetical example: advertising is 6,000 units, sales team work with new leads is 4,000. In a month 50 new clients came in. CAC = 10,000 / 50 = 200 units.

Why it matters to an owner

CAC is the main limit on growth. It is compared with LTV: if a client brings in less over their lifetime than it costs to acquire them, growth only increases losses.

There are two ways to lower CAC: buy traffic more cheaply or handle what you have already bought better. The second is often easier. If the team replies faster and abandons fewer chats, the same leads produce more clients, and CAC falls without changing the ad budget.

Common mistakes

  • Counting only advertising and forgetting sales salaries.
  • Dividing by all applications or by all clients, including returning ones.
  • Mixing channels: the overall CAC looks fine, while one source has long been running at a loss.

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