Can you objectively evaluate the effectiveness of your advertising campaigns? Which promotion channels are most beneficial for your business?

If you can answer these questions, then phone number database you are using the CAC metric. If not, this article will help you understand how to use it.

What is CAC

CAC (Customer Acquisition Cost) is an indicator that reflects the costs of attracting one new client. It includes expenses related to the development of a marketing strategy, creation and launch of advertising campaigns, as well as their optimization. Correctly calculated CAC helps to evaluate the profitability of marketing efforts and calculate future costs of attracting clients.

The CAC metric is a key tool for both marketers and business owners because it allows you to:

assess the financial stability and effectiveness of the business model;
identify the most cost-effective customer acquisition channels and optimize marketing costs;
identify weak points in the marketing funnel and strengthen them.
CAC in Marketing

Let’s explain how CAC is used in marketing using an example.

Let’s say you’re launching a new service, for example, a chatbot builder. The marketer attracts traffic through contextual and targeted advertising, integrations with bloggers in Telegram. He develops a sales funnel, building the customer’s path from registration on the site to purchasing one of the tariffs.

How does a marketer apply CAC?

1. Determines the optimal amount to attract one new client

At the strategy creation stage, the marketer sets the target CAC based on business objectives. For example, his goal is to attract 1,000 leads in two weeks and sell 100 service packages. Having calculated all advertising costs, he predicts how much it will cost to attract one buyer.

2. Monitors and adjusts the campaign

After launch, the specialist monitors the results in different channels: context, target, Telegram. If a channel brings few leads or low quality traffic, it can be turned off and the budget can be redistributed to more effective channels.

3. Calculates CAC and summarizes the campaign results

After the campaign is completed, the marketer calculates the number of leads, final sales, and calculates the actual CAC. This allows you to evaluate the effectiveness coravin collaborates with a of the strategy and, if necessary, outline a plan for its optimization.

Takes into account only advertising costs:

For example, a company spent 70,000 rubles on contextual advertising, 70,000 rubles on targeted advertising, and 100,000 rubles on bloggers. As a result, 98 people virgin islands send bought service packages. Let’s substitute the values:

The basic formula is convenient for quickly calculating CAC and regularly monitoring the dynamics, especially if there is not enough data for a more detailed analysis.

Extended formula

Includes all marketing and advertising costs: salaries of a marketer, copywriter and designer, overhead costs, as well as the cost of tools used, such as advertising setup services, CRM and marketing platforms.

Let’s substitute some hypothetical figures. The total cost of specialist services was 70,000 rubles; advertising costs – 240,000 rubles, other costs – 1,000 rubles. The number of new clients attracted was 98.

Formula for calculating CAC for each channel

To calculate the cost of acquiring a customer from each channel:

Determine the costs and number of acquired customers for each channel. Use the basic or advanced formula depending on your business goals.
Calculate the CAC for each channel. This is the basic formula:

Let’s say you attracted 205 leads through targeted advertising, of which 7 people made it to the product payment. Let’s calculate CAC:

Detailed information on different channels helps to segment the audience more accurately and see weak points in the sales funnel. For example, if a specific channel attracts a lot of traffic, but has a low conversion rate at the following stages, this is a signal of possible problems in the funnel.