Customer Acquisition Cost (CAC) is a metric that quantifies the total cost associated with acquiring a new customer. It encompasses all expenses incurred in the [[marketing]] and [[sales]] efforts to attract and convert potential customers into actual buyers. To compute CAC, one typically adds up all the costs related to marketing activities, advertising campaigns, sales personnel salaries, software tools, and any other resources dedicated to customer acquisition over a specific period. This total cost is then divided by the number of new customers acquired during that same period. For example, if a company spends $100,000 on acquisition efforts in a month and gains 1,000 new customers, the CAC would be $100 per customer.