How to Calculate CAC and Reduce Customer Acquisition Cost
Posted: Tue Jan 28, 2025 10:57 am
It seems that the business is developing successfully: advertising is launched, visitors are visiting the site, applications are coming in. But suddenly you notice that more and more money is being spent on marketing, and the profit seems to be decreasing. This is an alarm bell that suggests: it's time to figure out your CAC - the cost of attracting a client (Customer Acquisition Cost).
In this article, we will analyze how to correctly calculate CAC, what factors influence it, and, most importantly, how to reduce this metric so that the business grows steadily.
Content
What is CAC?
Why is CAC rising?
How to calculate CAC correctly
How to Lower CAC: A Step-by-Step Plan
How Andata Helps Reduce CAC
Conclusion
What is CAC?
CAC is the sum of all expenses to attract one customer. This includes canada consumer email list advertising costs, employee salaries, technologies used, platform commissions, and even hidden costs, such as content production.
The formula is simple:
For example, if you spent 1,000,000 rubles on marketing in a month and received 500 new clients, then:
Each client cost you 2,000 rubles. Now it is important to understand: is this a lot or a little? To answer, you need to compare CAC with LTV (Lifetime Value) - how much profit the client brings over the entire period of cooperation. If CAC approaches LTV, your business risks operating at a loss.
In this article, we will analyze how to correctly calculate CAC, what factors influence it, and, most importantly, how to reduce this metric so that the business grows steadily.
Content
What is CAC?
Why is CAC rising?
How to calculate CAC correctly
How to Lower CAC: A Step-by-Step Plan
How Andata Helps Reduce CAC
Conclusion
What is CAC?
CAC is the sum of all expenses to attract one customer. This includes canada consumer email list advertising costs, employee salaries, technologies used, platform commissions, and even hidden costs, such as content production.
The formula is simple:
For example, if you spent 1,000,000 rubles on marketing in a month and received 500 new clients, then:
Each client cost you 2,000 rubles. Now it is important to understand: is this a lot or a little? To answer, you need to compare CAC with LTV (Lifetime Value) - how much profit the client brings over the entire period of cooperation. If CAC approaches LTV, your business risks operating at a loss.