The history of CAC dates back to the 1990s, when chinese overseas america phone number data companies began to invest more heavily in marketing activities and needed tools to measure the profitability of these investments.
CAC is used in many companies – of different sizes and operating in different industries. It works well in e-commerce, digital marketing and sales – in all companies that want to assess the effectiveness of their marketing strategies.
Calculating CAC
The average customer acquisition cost (CAC) is calculated by dividing all customer acquisition expenses by the number of customers acquired in a given period . These expenses can include marketing and advertising costs, sales and marketing team salaries, tool and software costs, and other indirect costs.
An example of how to calculate the cost of acquiring a new customer, step by step:
Add up all your customer acquisition costs. These costs include marketing expenses (e.g., ads, email campaigns, social media), team member salaries, and tool costs (e.g., CRM software).
Define the period for which you will calculate CAC – it can be a month, a quarter, a year, the duration of a specific image campaign, etc.
Identify the number of new customers acquired during this period – this number should be measured as precisely as possible; it can be obtained from sales data, website analytics or CRM system. Much depends on the specifics of the company, its size, the tools used and even the industry in which it operates.
Divide your total costs by the number of customers you acquired. For example, if you spent $100,000 on marketing and sales in a quarter and acquired 100 customers, your CAC is $1,000 per customer ($100,000/100 customers).
Also read: Effective follow-up strategies in telemarketing – how to increase sales efficiency?
In practice, these calculations can be more complicated – it may be necessary to isolate customers acquired as part of a specific marketing campaign or those coming from specific communication channels. Today, this can be done effectively using various types of computer systems and analytical tools. Analytics can be relatively easily performed in the case of online activities, because users leave a lot of detailed information about their behavior and transactions on the site.
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Is it possible to calculate CAC for marketing activities?
Call centers usually have tools that allow you to measure the cost of acquiring a customer. Of course, not every tool is measurable in the same way, and sometimes it may be impossible. In the case of tools dedicated to sales, the CAC indicator can often be precisely indicated. This is the case, for example, in one of the key services provided by a contact center, i.e. a hotline. However, the key here is to identify which calls translate into acquiring new customers and assign costs to them . All operating costs must be taken into account and calculated correctly.
How to calculate overall CAC in cooperation with a call center?
Identify all the costs associated with running a call center (these costs include telephone marketing expenses, employee salaries, call center infrastructure maintenance costs, and other operating expenses). If you outsource the entire service to a call center company, this will simply be the amount you pay for the office's services.
Determine the number of new customers acquired by the call center. This data can be obtained from the CRM system or from reports that the office will provide you with as part of the service.
Divide the total costs by the number of customers acquired, according to the formula shown earlier.
Read also: What is a ticket system and how does it improve customer service?
It is worth remembering that call centers have tools that allow for precise tracking of customer behavior. In addition to the aforementioned CRM systems, there are also functions that allow for tracking the number of calls, call time, conversions, and other key indicators.
CAC Calculation - Frequently Asked Questions
What is CAC?
The acronym CAC comes from the English expression cost of acquiring customer, which in Polish means the cost of acquiring a customer. It is a measure used in marketing and business management to assess the effectiveness of a company's investment in acquiring new customers.
How is CAC calculated?
