Which of the following is included in the customer acquisition cost (CAC)?

Customer acquisition cost (CAC) refers to the total expenses incurred to acquire a new customer. This metric is crucial for businesses as it directly impacts profitability and growth strategies. Marketing and sales expenses are integral components of CAC because they represent the investment made in attracting potential customers and converting them into paying customers. This includes costs associated with advertising, promotions, sales personnel, and the overall marketing strategy aimed at driving customer engagement and sales.

In this context, the inclusion of marketing and sales expenses in CAC is essential for evaluating the effectiveness of acquisition strategies. It allows businesses to measure how much they are spending to gain each new customer and assess whether these efforts yield a favorable return on investment.