Expenses incurred on events and sponsorships

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This business metric is usually used along with another important metric for businesses – customer lifetime value (LTV). It measures the amount of revenue generated by a new customer. CAC is also used with monthly recurring revenue (MRR) to identify whether a company is operating efficiently.

Expenses That Contribute to Your Customer Acquisition Cost
Here are the expenses that contribute to your overall customer acquisition cost.

Salaries for marketing and sales personnel.
Equipment used by marketing and sales personnel, including phones, computers, printers, etc.
The cost of applications and software, including customer relationship management (CRM), marketing automation tools, etc.

Third-party agencies and consultants hired for marketing hong kong phone number list and advertising requirements.
Advertising expenses, including online ads, direct mail, out-of-home advertising, etc.
When you discount the listing price of a product to acquire a new customer, the discounted amount is added to CAC.
Some businesses may incur other sales and marketing expenses in addition to the ones listed above, depending on the nature and size of your business. Considering all sales and marketing expenses is essential to accurately calculate CAC.

Incorporating Costs into Your Customer Acquisition Plan: Key Considerations
Let’s look at some of the most important factors that influence your CAC.

Target market & audience
The specific target market or audience you’re trying to reach will impact your CAC. If you’re targeting a smaller and more niche target audience, you may require specialised marketing efforts, leading to higher CAC.