How do I calculate my CAC?

What is CAC?

CAC stands for Cost of Customer Acquisition, or Customer Acquisition Cost. CAC helps us to determine if you are using the best options to attract new customers. If your CAC is higher than your industry’s average this is a strong indicator that you are NOT using the best channels to find & connect with potential new customers.

How do you calculate your CAC?

photo source: https://blog.hubspot.com/service/what-does-cac-stand-for

  1. Add up all of the costs associated with your sales & marketing initiatives last month (this includes: salaries & commissions paid to your sales & marketing teams, the costs of ads purchased, retainers paid to PR companies & marketing strategy consultants, etc.)
  2. Divide this total number by the number of new customers acquired last month.
  3. This is last month’s CAC. If it is high, do not worry this is a number that I built Molo9™ to help you decrease. Calculate your CAC every month moving forward & send Molo9™ a love letter when we hit your CAC goals.

In case of emergency:

If no one knows your CAC & you really are unable to calculate it, err on the side of caution and assume that it is “too high”. Moving forward you will want to track this each month so that you know if your marketing strategies are actually growing your company, or killing it.

The relationship between CAC & SEO

Typically your cost of advertising drops as the amount of incoming organic traffic increases. This is why your CAC tends to decrease as your organic search engine rankings improve.

This is also why some founders get very upset when their search engine rankings are impacted.

Hey ,

This piece was composed by Adi Soozin, Founder of Molo9™. If you need more help, you can contact our support team, or click here attend Ms. Soozin’s next live Q&A.

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