If a company spent $120,000 on prospecting in Q1 and acquired 300 new customers, what is CAC?

• A. $400 per new customer.
• B. $600 per new customer.
• C. $300 per new customer.
• D. $250 per new customer.

Answer: (A)

CAC is the average amount spent to acquire one new customer. You find it by dividing the total prospecting expenditure by the number of new customers gained. Here, 120,000 spent and 300 new customers were acquired, so CAC = 120,000 ÷ 300 = 400. So the cost per new customer is $400.