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What does it mean?

Customer Acquisition Cost

This is your total Sales and Marketing cost. To calculate, follow these steps for a given time period (month, quarter, or year):

  1. Add up program or advertising spend + salaries + commissions + bonuses + overhead.
  2. Divide by the number of new customers in that time period.

For example, if you spend $500,000 on Sales and Marketing in a given month and added 50 customers that same month, then your CAC was $10,000 that month.