Customer Acquisition Cost

Customer Acquisition Cost (CAC) is the amount of money a company spends to acquire a new customer. It includes all the expenses related to marketing, sales, and advertising efforts aimed at attracting new customers to your product or service.

Think of CAC as the investment you make to bring in new customers. Just like you would spend money to buy tools for gardening, you spend money on marketing and sales to grow your customer base.

Calculating and monitoring CAC is crucial for product managers because it helps you understand the effectiveness of your customer acquisition strategies and optimize your budget allocation. It's like keeping an eye on your gardening expenses to ensure you're getting a good return on investment.