The customer acquisition cost or CAC is the economic investment we have made to get a potential consumer to convert in a final conversion and purchase our product or service. It is a metric applicable to the different areas of online marketing: SEO, SEM, emailing...
How is the Customer Acquisition Cost calculated?
To calculate the cost of customer acquisition, we have to divide the total amount spent on marketing to get customers by the number of customers obtained with that investment.
In this way, for example, the real value of a customer who has made a purchase of 50 euros in our e-commerce, is not 50 euros, but the value of his purchase minus the amount we have invested in getting him to convert. This formula is only done the first time you buy. The following times you do it (if we have not made any specific investment for it), the value of the customer will be equal to the amount of your purchase.
In this sense, to calculate with some foresight the cost of customer acquisition that we can afford in a campaign, we will have to take into account what the average purchase value of our customers is. That is, how much do they usually spend on average.
This is because if, for example, we are a decoration store and our customers spend an average of €30, it makes no sense for our customer acquisition cost to be €20. On the other hand, it would make sense to invest that if what we sell are luxury cruises on the Nile and the average purchase value is €3,500.
Therefore, the CAC or customer acquisition cost is an effective metric to assess how much we can spend on customer acquisition.
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Digital Marketing