CAC
Also known as: Customer Acquisition Cost
CAC is the average total cost a business spends to acquire one new customer.
CAC (Customer Acquisition Cost) is what it costs, on average, to win a customer — total sales and marketing spend divided by the number of customers gained. It tells you how efficient your growth engine is.
CAC only makes sense compared to lifetime value: if a customer is worth far more than they cost to acquire, you can invest confidently in growth. If CAC approaches LTV, the model is under strain.
LTV
LTV is the total revenue a business can expect from a single customer over the entire duration of their relationship.
Conversion rate
Conversion rate is the proportion of people who take a desired action out of the total who had the opportunity to.
Sales funnel
A sales funnel is the staged journey a prospect moves through from first awareness of a business to becoming a customer.
Put CAC to work this week.
Knowing the term is step one. The business kits ship the systems and templates that turn concepts like this into a running operation.