A business spent 30,000 on marketing and 10,000 on sales last period and gained 2,000 new customers. What is the CAC for that period?

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Multiple Choice

A business spent 30,000 on marketing and 10,000 on sales last period and gained 2,000 new customers. What is the CAC for that period?

Explanation:
CAC measures how much a business spends to acquire each new customer. It’s found by taking all the money spent on sales and marketing and dividing it by the number of new customers gained. In this scenario, add the marketing and sales costs: 30,000 plus 10,000 equals 40,000. The period yielded 2,000 new customers. So CAC = 40,000 divided by 2,000, which equals 20. That means it costs 20 dollars to acquire a single new customer for that period. Think of CAC as the total acquisition investment spread across every new customer won. If you only used one part of the spend (like marketing alone), you wouldn’t capture the full cost of acquisition.

CAC measures how much a business spends to acquire each new customer. It’s found by taking all the money spent on sales and marketing and dividing it by the number of new customers gained.

In this scenario, add the marketing and sales costs: 30,000 plus 10,000 equals 40,000. The period yielded 2,000 new customers. So CAC = 40,000 divided by 2,000, which equals 20. That means it costs 20 dollars to acquire a single new customer for that period.

Think of CAC as the total acquisition investment spread across every new customer won. If you only used one part of the spend (like marketing alone), you wouldn’t capture the full cost of acquisition.

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