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Create ad </a> </li> </ul> <div class="utility-navigation-wrapper non-desktop-only"> <nav id="utility-navigation" class="utility-navigation" aria-label="Utitlity navigation" data-component-js-load-path="components/navigation/utility"> <div class="utility-navigation-river content-margin"> <div class="free-links utility-navigation-section"> <p class="free-links-message"></p> <ul class="free-links-list"> <li id="lms-homepage-header-navigation-utility-nav-mobile-free-link-linkedin-marketing-labs" class="free-link"> <a href="https://training.marketing.linkedin.com/?trk=lms-tlt" title="Learn the science of marketing to professionals on LinkedIn with free courses and certifications" target="_blank"> LinkedIn Marketing Labs </a> </li> <li id="lms-homepage-header-navigation-utility-nav-mobile-free-link-help-center" class="free-link"> <a href="https://www.linkedin.com/help/lms?trk=lms-tlt" title="Visit the Advertiser Help Center" target="_blank"> Help Center </a> </li> <li id="lms-homepage-header-navigation-utility-nav-mobile-free-link-blog" class="free-link"> <a href="https://www.linkedin.com/business/marketing/blog?trk=lms-tlt" title="Visit the LinkedIn Ads Blog" target="_blank"> Blog </a> </li> </ul> </div> </div> </nav> </div> </nav> </div> </div> <div id='lms-homepage-header-navigation-primary-nav-mobile-advertising' class="secondary-navigation-wrapper advanced" data-menu="item_1" tabindex="-1" role="menu" aria-labelledby="sub-menu-button-item_1"> <nav class="secondary-navigation" role="navigation" id="secondary-menu-item_1" aria-label="Advertising link navigation"> <div class="secondary-nav-panel js-hide-sub-menu non-desktop-only"> <button class="sub-navigation-button js-hide-sub-menu js-analytics-event" aria-label="Back"> <li-icon type="chevron-left-icon" size="small" class="" a11y-text="" ""> </li-icon> </button> <h3 class="secondary-nav-title">Advertising</h3> </div> <div class="secondary-nav-overview non-desktop-only"> <a href="/marketing-solutions/ads" class="secondary-nav-link js-analytics-event" title="Advertising" data-analytics-config="{"category":"Internal","action":"click - Advertising","label":"/content/me/business/en-us/marketing-solutions/ads - header","componentId":"header_741709591"}"> </a> </div> <div class="inherited-column-frame column-frame main-container padding-gutter "> <div class="column-frame-foreground content-margin"> <div class="columns-container"> <section class="inherited-column-wrapper column-3 "> <section class="inherited-column default"> <h3 class="col-headline "> How to get started </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/linkedin-pages" title="Create a LinkedIn Page" data-analytics-config="{"category":"Internal","action":"click - Create a LinkedIn Page","label":"/content/me/business/en-us/marketing-solutions/linkedin-pages.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_1063777034"}"> Create a LinkedIn Page </a> <p class="link-list-caption ">First, build your company's brand and build trust with your community.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/campaign-manager" title="Campaign Manager" data-analytics-config="{"category":"Internal","action":"click - Campaign Manager","label":"/content/me/business/en-us/marketing-solutions/campaign-manager.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_1063777035"}"> Campaign Manager </a> <p class="link-list-caption ">Second, create your first ad campaign on LinkedIn's ad platform.</p> </li> </ul> </nav> </div> </section> <a class="col-link js-analytics-event" href="https://www.linkedin.com/ads/create?trk=lms-36" title="Sign in to Campaign Manager" target="_blank" data-analytics-config="{"category":"External LinkedIn","action":"click - Sign in to Campaign Manager","label":"https://www.linkedin.com/ads/create?trk=lms-36 - header - inherited-column-frame - inherited-column","componentId":"actionable-content_1702443088"}"> Sign in to Campaign Manager </a> </section> </section> <section class="inherited-column-wrapper column-3 "> <section class="inherited-column default"> <h3 class="col-headline "> Ad Formats </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/native-advertising?trk=lms-25" title="Sponsored Content" data-analytics-config="{"category":"Internal","action":"click - Sponsored Content","label":"/content/me/business/en-us/marketing-solutions/native-advertising.html?trk=lms-25 - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_221438241"}"> Sponsored Content </a> <p class="link-list-caption ">Reach and engage a professional audience in the LinkedIn feed.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/sponsored-messaging?trk=lms-25" title="Sponsored Messaging" data-analytics-config="{"category":"Internal","action":"click - Sponsored Messaging","label":"/content/me/business/en-us/marketing-solutions/sponsored-messaging.html?trk=lms-25 - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_221438240"}"> Sponsored Messaging </a> <p class="link-list-caption ">Engage your prospects where professional conversations happen.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/dynamic-ads?trk=lms-25" title="Dynamic Ads" data-analytics-config="{"category":"Internal","action":"click - Dynamic Ads","label":"/content/me/business/en-us/marketing-solutions/dynamic-ads.html?trk=lms-25 - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_221438239"}"> Dynamic Ads </a> <p class="link-list-caption ">Engage prospects with ads automatically personalized to them.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/ppc-advertising?trk=lms-25" title="Text Ads" data-analytics-config="{"category":"Internal","action":"click - Text Ads","label":"/content/me/business/en-us/marketing-solutions/ppc-advertising.html?trk=lms-25 - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_221438238"}"> Text Ads </a> <p class="link-list-caption ">Self-service ad formats to create campaigns in minutes.</p> </li> </ul> </nav> </div> </section> <a class="col-link js-analytics-event" href="/marketing-solutions/ads?trk=lms-25" title="See all Ad formats" data-analytics-config="{"category":"Internal","action":"click - See all Ad formats","label":"/content/me/business/en-us/marketing-solutions/ads.html?trk=lms-25 - header - inherited-column-frame - inherited-column","componentId":"actionable-content_1748052337"}"> See all Ad formats </a> </section> </section> <section class="inherited-column-wrapper column-3 "> <section class="inherited-column default"> <h3 class="col-headline "> Learn More </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/ads/pricing?trk=lms-36b" title="Pricing" data-analytics-config="{"category":"Internal","action":"click - Pricing","label":"/content/me/business/en-us/marketing-solutions/ads/pricing.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590132"}"> Pricing </a> <p class="link-list-caption ">Discover how much it costs to advertise on LinkedIn.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/ad-targeting?trk=lms-36b" title="Targeting" data-analytics-config="{"category":"Internal","action":"click - Targeting","label":"/content/me/business/en-us/marketing-solutions/ad-targeting.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590131"}"> Targeting </a> <p class="link-list-caption ">Reach the people who matter most to your business.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/generate-leads?trk=lms-36b" title="Lead Generation" data-analytics-config="{"category":"Internal","action":"click - Lead Generation","label":"/content/me/business/en-us/marketing-solutions/generate-leads.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590130"}"> Lead Generation </a> <p class="link-list-caption ">Qualified leads come from a quality audience on LinkedIn.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/boosting?trk=lms-36b" title="Boosting" data-analytics-config="{"category":"Internal","action":"click - Boosting","label":"/content/me/business/en-us/marketing-solutions/boosting.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590129"}"> Boosting </a> <p class="link-list-caption ">An easy way to reach new audiences by amplifying your best content.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/conversion-tracking?trk=lms-36b" title="Conversion Tracking" data-analytics-config="{"category":"Internal","action":"click - Conversion Tracking","label":"/content/me/business/en-us/marketing-solutions/conversion-tracking.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590128"}"> Conversion Tracking </a> <p class="link-list-caption ">Measure the true impact of your LinkedIn ads.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/reporting-analytics?trk=lms-36b" title="Reporting & Analytics" data-analytics-config="{"category":"Internal","action":"click - Reporting & Analytics","label":"/content/me/business/en-us/marketing-solutions/reporting-analytics.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590127"}"> Reporting & Analytics </a> <p class="link-list-caption ">Measure the ROI of your LinkedIn ads.</p> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/objective-based-advertising?trk=lms-36b" title="Objective Based" data-analytics-config="{"category":"Internal","action":"click - Objective Based Advertising","label":"/content/me/business/en-us/marketing-solutions/success/objective-based-advertising.html?trk=lms-36b - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_781590126"}"> Objective Based Advertising </a> <p class="link-list-caption ">Choose your LinkedIn ad format based on your objective and customer journey.</p> </li> </ul> </nav> </div> </section> <a class="col-link js-analytics-event" href="/marketing-solutions/success/best-practices" title="Ad Tips & Best Practices" data-analytics-config="{"category":"Internal","action":"click - Ad Tips & Best Practices","label":"/content/me/business/en-us/marketing-solutions/success/best-practices.html - header - inherited-column-frame - inherited-column","componentId":"actionable-content_903580466"}"> Ad Tips & Best Practices </a> </section> </section> </div> </div> </div> </nav> </div> <div id='lms-homepage-header-navigation-primary-nav-mobile-why-linkedin' class="secondary-navigation-wrapper basic" data-menu="item_6" tabindex="-1" role="menu" aria-labelledby="sub-menu-button-item_6"> <nav class="secondary-navigation" role="navigation" id="secondary-menu-item_6" aria-label="Why LinkedIn link navigation"> <div class="secondary-nav-panel js-hide-sub-menu non-desktop-only"> <button class="sub-navigation-button js-hide-sub-menu js-analytics-event" aria-label="Back"> <li-icon type="chevron-left-icon" size="small" class="" a11y-text="" ""> </li-icon> </button> <h3 class="secondary-nav-title">Why LinkedIn</h3> </div> <div class="secondary-nav-overview-basic non-desktop-only"> <a href="/marketing-solutions/why-advertise-on-linkedin?trk=lms-36b-h" class="secondary-nav-link-basic js-analytics-event" title="Why LinkedIn" data-analytics-config="{"category":"Internal","action":"click - Why LinkedIn","label":"/content/me/business/en-us/marketing-solutions/why-advertise-on-linkedin?trk=lms-36b-h - header","componentId":"header_741709591"}"> </a> </div> <nav> <ul class="link-list "> <li class="link-list-item"> <a href="/marketing-solutions/why-advertise-on-linkedin" class="link-list-link js-analytics-event" title="Why LinkedIn"> Why LinkedIn </a> </li> <li class="link-list-item"> <a href="/marketing-solutions/audience" class="link-list-link js-analytics-event" title="Our Audience"> Our Audience </a> </li> <li class="link-list-item"> <a href="/marketing-solutions/success/marketing-case-studies" class="link-list-link js-analytics-event" title="Customer Stories"> Customer Stories </a> </li> </ul> </nav> </nav> </div> <div id='lms-homepage-header-navigation-primary-nav-mobile-linkedin-pages' class="secondary-navigation-wrapper basic" data-menu="item_5" tabindex="-1" role="menu" aria-labelledby="sub-menu-button-item_5"> <nav class="secondary-navigation" role="navigation" id="secondary-menu-item_5" aria-label="LinkedIn Pages link navigation"> <div class="secondary-nav-panel js-hide-sub-menu non-desktop-only"> <button class="sub-navigation-button js-hide-sub-menu js-analytics-event" aria-label="Back"> <li-icon type="chevron-left-icon" size="small" class="" a11y-text="" ""> </li-icon> </button> <h3 class="secondary-nav-title">LinkedIn Pages</h3> </div> <div class="secondary-nav-overview-basic non-desktop-only"> <a href="/marketing-solutions/linkedin-pages" class="secondary-nav-link-basic js-analytics-event" title="LinkedIn Pages" data-analytics-config="{"category":"Internal","action":"click - LinkedIn Pages","label":"/content/me/business/en-us/marketing-solutions/linkedin-pages - header","componentId":"header_741709591"}"> </a> </div> <nav> <ul class="link-list "> <li class="link-list-item"> <a href="/marketing-solutions/linkedin-pages" class="link-list-link js-analytics-event" title="Create a LinkedIn Page"> Create a LinkedIn Page </a> </li> <li class="link-list-item"> <a href="/marketing-solutions/linkedin-pages/best-practices" class="link-list-link js-analytics-event" title="LinkedIn Pages Best Practices"> LinkedIn Pages Best Practices </a> </li> <li class="link-list-item"> <a href="/marketing-solutions/my-company-tab" class="link-list-link js-analytics-event" title="My Company"> My Company </a> </li> <li class="link-list-item"> <a href="/marketing-solutions/linkedin-pages/showcase-pages" class="link-list-link js-analytics-event" title="Showcase Pages"> Showcase Pages </a> </li> </ul> </nav> </nav> </div> <div id='lms-homepage-header-navigation-primary-nav-mobile-resources' class="secondary-navigation-wrapper advanced" data-menu="item_3" tabindex="-1" role="menu" aria-labelledby="sub-menu-button-item_3"> <nav class="secondary-navigation" role="navigation" id="secondary-menu-item_3" aria-label="Resources link navigation"> <div class="secondary-nav-panel js-hide-sub-menu non-desktop-only"> <button class="sub-navigation-button js-hide-sub-menu js-analytics-event" aria-label="Back"> <li-icon type="chevron-left-icon" size="small" class="" a11y-text="" ""> </li-icon> </button> <h3 class="secondary-nav-title">Resources</h3> </div> <div class="secondary-nav-overview non-desktop-only"> <a href="/marketing-solutions/success" class="secondary-nav-link js-analytics-event" title="Resources" data-analytics-config="{"category":"Internal","action":"click - Resources","label":"/content/me/business/en-us/marketing-solutions/success - header","componentId":"header_741709591"}"> </a> </div> <div class="inherited-column-frame column-frame main-container padding-gutter "> <div class="column-frame-foreground content-margin"> <div class="columns-container"> <section class="inherited-column-wrapper column-4 no-link no-headline"> <section class="inherited-column default"> <section class="inherited-column-content-wrapper headline-comp-padding"> </section> </section> </section> <section class="inherited-column-wrapper column-4 no-link"> <section class="inherited-column default"> <h3 class="col-headline "> Getting Started </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/getting-started" title="How to Create a Campaign" data-analytics-config="{"category":"Internal","action":"click - How to Create a Campaign","label":"/content/me/business/en-us/marketing-solutions/success/getting-started.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_181768201"}"> How to Create a Campaign </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/ads-guide" title="Ads Specs" data-analytics-config="{"category":"Internal","action":"click - Ads Specs","label":"/content/me/business/en-us/marketing-solutions/success/ads-guide.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_181768202"}"> Ads Specs </a> </li> </ul> </nav> </div> </section> </section> </section> <section class="inherited-column-wrapper column-4 no-link"> <section class="inherited-column default"> <h3 class="col-headline "> Learn </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success" title="Success Hub" data-analytics-config="{"category":"Internal","action":"click - Success Hub","label":"/content/me/business/en-us/marketing-solutions/success.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_740915382"}"> Success Hub </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/marketing-training-certification" title="Learning Courses & Certifications" data-analytics-config="{"category":"Internal","action":"click - Learning Courses & Certifications","label":"/content/me/business/en-us/marketing-solutions/success/marketing-training-certification.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_740915381"}"> Learning Courses & Certifications </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="https://www.linkedin.com/business/marketing/blog/linkedin-ads" title="LinkedIn Ads Blog" target="_blank" data-analytics-config="{"category":"External LinkedIn","action":"click - LinkedIn Ads Blog","label":"https://www.linkedin.com/business/marketing/blog/linkedin-ads - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_740915380"}"> LinkedIn Ads Blog </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/marketing-terms" title="Marketing Glossary" data-analytics-config="{"category":"Internal","action":"click - Marketing Glossary","label":"/content/me/business/en-us/marketing-solutions/success/marketing-terms.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_740915379"}"> Marketing Glossary </a> </li> </ul> </nav> </div> </section> </section> </section> <section class="inherited-column-wrapper column-4 no-link"> <section class="inherited-column default"> <h3 class="col-headline "> By Business Type </h3> <section class="inherited-column-content-wrapper "> <div class="link-list parbase section"> <nav> <ul class="link-list "> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/success/small-business-advertising" title="Small Businesses" data-analytics-config="{"category":"Internal","action":"click - Small Businesses","label":"/content/me/business/en-us/marketing-solutions/success/small-business-advertising.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_1663598965"}"> Small Businesses </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/marketing-agencies" title="Agencies" data-analytics-config="{"category":"Internal","action":"click - Agencies","label":"/content/me/business/en-us/marketing-solutions/marketing-agencies.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_1663598964"}"> Agencies </a> </li> <li class="link-list-item"> <a class="link-list-link js-analytics-event" href="/marketing-solutions/marketing-partners" title="Partners" data-analytics-config="{"category":"Internal","action":"click - Partners","label":"/content/me/business/en-us/marketing-solutions/marketing-partners.html - header - inherited-column-frame - inherited-column - link-list","componentId":"actionable-content_1663598963"}"> Partners </a> </li> </ul> </nav> </div> </section> </section> </section> </div> </div> </div> </nav> </div> </header> </div> </section> <section class="page-alert-container"> </section> <script type="text/template" id="page-alert-template"> <div class="alert notice page-alert hidden" role="alert" tabindex="-1"> <div class="page-alert-wrapper"> <p class="page-alert-message"></p> <button class="page-alert-dismiss"> <li-icon class="filter-frame-close-button-icon" type="cancel-icon" size="small" a11y-text="Dismiss Alert"></li-icon> <span class="a11y-hidden">Dismiss Alert</span> </button> </div> </div> </script> <div class="container js-root-container"> <div class="wrapper"> <section id="main" class="site-wrapper" role="main"> <section id="content" class="site-content frame group"> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome has-background has-content-width-background hide-on--tablet-portrait hide-on--tablet-landscape hide-on--desktop " data-responsive-height="0px,0px,0px,315px,200px" data-responsive-min-height="0px,0px,0px,315px,200px" data-enable-min-height="true" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_767690296" data-component-js-load-path="components/content/banner"> <div class="banner-background background-color solid blue-10"> <picture><source 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data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-mob-port-v01.jpg.original.jpg"/></picture> </div> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-24" id="banner-content-container-banner_767690296"> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="top" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1074927847" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid blue-10"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-blue-bg-tab-mob-v02.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-blue-bg-tab-mob-v02-2x.jpg 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-blue-bg-tab-mob-v02.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-blue-bg-tab-mob-v02-2x.jpg 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="flexible-column-frame-background-image desktop-middle-center tablet-landscape-middle-center tablet-portrait-middle-center mobile-landscape-top-center mobile-portrait-top-center lazy-load" alt="Illustration of an individual sitting at a table and working on their laptop." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-hero-bg-dsk-v02.jpg/jcr:content/renditions/cac-hero-bg-blue-bg-tab-mob-v02.jpg"/></picture> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-13-columns align-top stacking-order-1"> <div class="spacer parbase section"> <div class="spacer-component spacing__desktop--3 spacing__tablet-landscape--1 spacing__tablet-portrait--0 spacing__mobile-landscape--1 spacing__mobile-portrait--0 background-color none "></div> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-center rich-text__padding--none rich-text__width--narrow"> <p><span class="rte-style__body--medium"><a href="/marketing-solutions/success/marketing-terms">Marketing Glossary</a> / Customer Acquisition Cost (CAC)</span></p> <h1><span class="rte-style__headline--xlarge">Customer Acquisition Cost (CAC)</span></h1> <h2><span class="rte-style__headline--small">How to Calculate CAC and Why It Matters</span><br/> </h2> </div> </section> </div> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="true" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_1722556360" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--none"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-24" id="banner-content-container-banner_1722556360"> <div class="banner-actions"> <a class=" banner-action banner-action-primary js-analytics-event" href="/marketing-solutions/reporting-analytics" title="Learn More" data-analytics-config="{"category":"Internal","action":"click - Learn More","label":"/content/me/business/en-us/marketing-solutions/reporting-analytics.html - flexible-column-frame (top) - banner","componentId":"actionable-content_2062535796"}"> Learn More </a> </div> </div> </div> </section> </div> <div class="spacer parbase section"> <div class="spacer-component spacing__desktop--3 spacing__tablet-landscape--1 spacing__tablet-portrait--0 spacing__mobile-landscape--1 spacing__mobile-portrait--0 background-color none "></div> </div> </section> <section class="flexible-column-frame-column grid-11-columns align-top stacking-order-2"> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1529486905" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <p><span class="rte-style__headline--small">Marketing leaders must optimize their tracked monthly and quarterly campaign metrics to demonstrate sustainable growth with the lowest customer acquisition cost (CAC) possible.</span></p> <p><span class="rte-style__headline--small">In this guide, we’ll explain what customer acquisition cost is, how to determine CAC and how to use key benchmarks to improve it over time while keeping expenses down.</span></p> </div> </section> </div> <div class="basic-list parbase section"> <section id="" data-anchorable class="basic-list-component basic-list-icon-text light-monochrome" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-component-js-load-path="components/layout/basic-list"> <div class="content-margin"> <header class="component-heading-group component-heading-group-align-default " data-responsive-contrast=""> <p class="component-heading-headline subheadline-21"> Learn more about Customer Acquisition Cost: </p> </header> </div> <div data-mobile-layout="stacked" class="mobile-layout-stacked content-margin"> <div class="resource-content resource-content-4-up"> <ul class="basic-list-items js-filterable-container"> <li class="basic-list-item js-filterable filterable icon-text-wrapper"> <article class="resource icon-text filterable-content "> <a href="#what-is-cac" class="image-link js-analytics-event" title="What is customer acquisition cost?"> <div class="resource-image"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a document with a dollar sign and table on it." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png"/></picture> </div> </div> <div data-eq-height-group="1" data-eq-height-states="tablet,desktop"> </div> <p class="resource-button component-heading-link">What is customer acquisition cost?</p> </a> </article> </li> <li class="basic-list-item js-filterable filterable icon-text-wrapper"> <article class="resource icon-text filterable-content "> <a href="#calculating-cac" class="image-link js-analytics-event" title="Calculating customer acquisition cost"> <div class="resource-image"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a calculator." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png"/></picture> </div> </div> <div data-eq-height-group="1" data-eq-height-states="tablet,desktop"> </div> <p class="resource-button component-heading-link">Calculating customer acquisition cost</p> </a> </article> </li> <li class="basic-list-item js-filterable filterable icon-text-wrapper"> <article class="resource icon-text filterable-content "> <a href="#improve-cac" class="image-link js-analytics-event" title="Effective strategies to improve CAC over time"> <div class="resource-image"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a document with a writing utensil on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png"/></picture> </div> </div> <div data-eq-height-group="1" data-eq-height-states="tablet,desktop"> </div> <p class="resource-button component-heading-link">Effective strategies to improve CAC over time</p> </a> </article> </li> <li class="basic-list-item js-filterable filterable icon-text-wrapper"> <article class="resource icon-text filterable-content "> <a href="#growth-potential" class="image-link js-analytics-event" title="CAC and Marketing Growth Potential"> <div class="resource-image"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a line graph depicting an upward trajectory with a calculator on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png"/></picture> </div> </div> <div data-eq-height-group="1" data-eq-height-states="tablet,desktop"> </div> <p class="resource-button component-heading-link">CAC and Marketing Growth Potential</p> </a> </article> </li> </ul> </div> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="what-is-cac" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1035205217" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid solid-white"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg.original.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-dsk-v02-2x.jpg 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-tab-mob-v01.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-tab-mob-v01-2x.jpg 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-tab-mob-v01.jpg, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-tab-mob-v01-2x.jpg 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="flexible-column-frame-background-image desktop-top-center tablet-landscape-top-center tablet-portrait-top-center mobile-landscape-top-center mobile-portrait-top-center lazy-load" alt="" data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/bg/cac-what-is-cac-bg-dsk-v02.jpg/jcr:content/renditions/cac-what-is-cac-bg-tab-mob-v01.jpg"/></picture> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1564494351" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_1765186912" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-23" id="banner-content-container-banner_1765186912"> <div class="banner-icon"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png/jcr:content/renditions/Glossary-Term-icon-library-roi-03-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a document with a dollar sign and table on it." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-roi-03.png.original.png"/></picture> </div> </div> <h2 class="banner-headline headline-42"> What is customer acquisition cost? </h2> <p class="banner-subheadline subheadline-21"> <br/> CAC is an important measurement of the total costs a business must invest to acquire a new customer through sales and marketing efforts. This number can help marketers determine a new customer's value to a sales organization. Once businesses know how to calculate customer acquisition costs, they can identify any inefficiencies in their sales and marketing plans and find areas where they can reallocate budgets in the future. </p> </div> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png/jcr:content/renditions/cac-what-is-customer-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png/jcr:content/renditions/cac-what-is-customer-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png/jcr:content/renditions/cac-what-is-customer-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png/jcr:content/renditions/cac-what-is-customer-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png/jcr:content/renditions/cac-what-is-customer-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of two individuals, one sitting at a table and working on their laptop while the other is standing on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-what-is-customer-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> </div> </div> </div> </section> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <p><span class="rte-style__body--large"><b style="">Why is CAC important for marketing teams?</b><br/> </span></p> <p><span class="rte-style__body--medium">Marketing teams can use CAC metrics to understand their average spend to acquire a new customer. They can calculate it for different marketing channels over a specific period to determine which drove more customers with a lower CAC. The CAC calculation can, in turn, help marketers plan where to allocate their budgets for future marketing and advertising campaign strategies.</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--4 background-color none "></div></div> <div class="flexible-column-frame parbase section"> <section id="calculating-cac" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_2138638575" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid blue-10"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_1059456306" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-18" id="banner-content-container-banner_1059456306"> <div class="banner-icon"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a calculator." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-01.png.original.png"/></picture> </div> </div> <h2 class="banner-headline headline-42"> Calculating customer acquisition cost </h2> <p class="banner-subheadline subheadline-21"> <br/> To calculate CAC, businesses must determine the total cost of their sales and marketing efforts. Some key data points to factor into the total sales and marketing team expenditures for a specified period (e.g., monthly, quarterly, or annually) include:<br/> </p> </div> </div> </section> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <ol> <li><span class="rte-style__body--large">Ad campaign creative, copy, video production, and media buying budgets</span></li> <li><span class="rte-style__body--large">Email campaign creation and deployment</span></li> <li><span class="rte-style__body--large">Sales and marketing team salaries</span></li> <li><span class="rte-style__body--large">Content marketing and social media management budgets</span></li> <li><span class="rte-style__body--large">Sales and advertising tech stack budgets (e.g., analytics reporting, social media monitoring, advertising and email automation platforms, and CRMs)</span></li> <li><span class="rte-style__body--large">Product development costs to keep a Software as a Service (SaaS) or Ecommerce platform user-friendly, with an optimal customer experience</span></li> </ol> <div><span class="rte-style__body--large"><span style=""><b>Some businesses also factor in these data points for a more robust picture of the total costs:</b></span></span></div> <ul> <li><span class="rte-style__body--large">Campaign special offers (e.g., free shipping) or discounts (e.g., 30% off for a limited time only)</span></li> <li><span class="rte-style__body--large">Overhead expenses like furniture and office or retail spaces used to acquire new customers</span></li> <li><span class="rte-style__body--large">Legal fees associated with sales and marketing campaigns or client contracts</span></li> </ul> <p><span class="rte-style__body--large">Additionally, marketers must track how many new customers were acquired due to those efforts and through which channels or campaigns.</span></p> <p> </p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_514277165" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid amber-20"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <h3><span class="rte-style__headline--medium">What is the customer acquisition cost formula?</span></h3> <p><span class="rte-style__body--large">There are some different approaches to consider when calculating customer acquisition costs. Generally speaking, the CAC formula is as follows:<br/> </span></p> </div> </section> </div> <div class="embed parbase section"> <div> </div> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_2018136131" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid amber-30"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="spacer parbase section"> <div class="spacer-component spacing--1 background-color none "></div></div> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-cac-formula-dsk-v02-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-cac-formula-dsk-v02-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Customer Acquisition Cost = Total sales & marketing expenses / Total number of new customers" data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-cac-formula-dsk-v02.png.original.png"/></picture> </div> </div> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--1 background-color none "></div></div> </section> </div> </div> </div> </section> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <p><span class="rte-style__body--large">Businesses often start with calculating the average customer acquisition cost for a specified period. For example, an ecommerce marketing team may spend $2,000 in one month to acquire 200 new customers. By dividing $2000 by 200, they determine their average ecommerce customer acquisition cost is $10.</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--4 background-color none "></div></div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_552980176" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid sage-20"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <h3><span class="rte-style__headline--medium">What is the paid customer acquisition cost formula?</span></h3> <p><span class="rte-style__body--large">Marketers may also calculate CAC based on specific paid sales and marketing channels to identify areas of improvement or budget optimization. In this case, they may leave out their overhead expenses and employee salaries to only look at externally paid expenses related to customer acquisition costs.<br/> </span></p> </div> </section> </div> <div class="embed parbase section"> <div> </div> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_776572768" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid sage-30"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="spacer parbase section"> <div class="spacer-component spacing--1 background-color none "></div></div> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-paid-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-paid-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-paid-cac-formula-dsk-v02-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-paid-cac-formula-dsk-v02-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png/jcr:content/renditions/cac-cal-customer-paid-cac-formula-dsk-v02-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Paid Customer Acquisition Cost = Total sales and marketing expenses / Total customers acquired" data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-customer-paid-cac-formula-dsk-v02.png.original.png"/></picture> </div> </div> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--1 background-color none "></div></div> </section> </div> </div> </div> </section> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <p><span class="rte-style__body--large">Suppose a SaaS business spends $200,000 per month across two different advertising platforms, with a budget of $10,000 for each one.</span></p> <p><span class="rte-style__body--large"><b>Platform A:</b> Generates 75 customers in one month ($10,000/75 = $133.33)<br/> <span style=""><b>Platform B:</b> Generates 150 customers in one month ($10,000/150 = $66.7)</span></span></p> <p><span class="rte-style__body--large"><span style="">Using the calculation above, the business might decide to allocate more money to platform B in the future as it generated a lower SaaS customer acquisition cost.</span></span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--4 background-color none "></div></div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1292508938" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid cool-gray-30"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <h3><span class="rte-style__headline--medium">What is a good customer acquisition cost?</span></h3> <p><span class="rte-style__body--large">Some key factors influence whether a business’s customer acquisition cost offers a good <a href="/marketing-solutions/success/marketing-terms/roi" target="_self">return on investment (ROI)</a>.</span></p> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1300992698" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-8-columns align-top stacking-order-1"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-01-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-01-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of corporate office buildings with the word "New!" on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-01-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h4><span class="rte-style__body--large"><b>1. Is the business new or entering a new market?</b></span></h4> <p><span class="rte-style__body--medium">The customer acquisition cost for a business already established in a new market will differ significantly from a startup. The same goes for the CAC for a company that's trying to reach a new demographic or is about to sell in a new geographic region.</span></p> <p><span class="rte-style__body--medium">If marketers want to attract new markets or customer segments, regardless of the company's age, they can expect their CAC to be higher. We’ll provide some strategies to improve CAC over time shortly.</span></p> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-8-columns align-top stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-02-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png/jcr:content/renditions/cac-cal-good-cac-02-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of a balance scale, "3x/CLV" on the left and "1x/CAC" on the right." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-02-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h4><span class="rte-style__body--large"><b>2. What is the CAC to CLV ratio?</b></span></h4> <p><span class="rte-style__body--medium">It's important to relate CAC to a company’s customer lifetime value (CLV) to evaluate the ROI of customer acquisition costs. Many experts recommend that the CLV be at least three times greater for a CLV to CAC ratio of 3:1 or higher.</span></p> <p><span class="rte-style__body--medium">For example, a SaaS company may perceive its CAC as high at $200 to acquire a new customer. However, this may not be the case if their average customer retention rate is five years and each customer spends $400 on the SaaS platform annually.</span></p> <p><span class="rte-style__body--medium">Multiply a five-year customer lifetime X $400 to get an average CLV of $2000.</span></p> </div> </section> </div> <div class="see-more-frame parbase section"> <section class="see-more-frame " data-component-js-load-path="components/layout/see-more-frame"> <section class="see-more-content" id="ratio-formula" data-tablet-portrait="0" data-tablet-landscape="0" data-mobile-portrait="0" data-mobile-landscape="0" data-desktop="0" tabindex="0" aria-describedby="preview-summary"> <p id="preview-summary" class="a11y-hidden">CAC to CLV ratio formula</p> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <h5><span class="rte-style__body--large"><b>CAC to CLV ratio formula<br/> </b></span></h5> <p><span class="rte-style__body--medium">A simple equation would divide the CLV of $2,000 by the $200 customer acquisition cost to get a ratio of 10:1. So while the cost to acquire a new customer might have seemed high at first, the CLV to CAC ratio indicates that the average new customer provides a significant ROI to the business longterm.</span></p> <p><span class="rte-style__body--medium">When a ratio is that high, it’s a good indication that a business should invest more in sales and marketing efforts to attract new customers who fit a similar profile. Marketers can try <a href="/marketing-solutions/ad-targeting/retargeting" style="" target="_self">retargeting strategies to increase conversions with highly-valued customer segments</a> with similar online behaviors, such as the pages they often visit on branded or publisher websites and social networks.</span></p> <p><span class="rte-style__body--medium">Using data about a target customer’s previous interactions with sponsored content ads, retargeting helps marketers deepen customer relationships through specific and relevant messaging.</span></p> </div> </section> </div> </section> <span class="see-more-empty-line"></span> <button class="see-more-button js-expandable js-analytics-event" aria-controls="ratio-formula" data-more-icon="chevron-down-icon" data-less-icon="chevron-up-icon" aria-expanded="false" data-less-text="See less" href="#ratio-formula" data-more-text="See more"> <span class="js-expandable-text">See less</span> <li-icon type="chevron-up-icon" size="large" class="see-more-button-icon js-expandable-icon" a11y-text="" ""> </li-icon> </button> </section> </div> </section> <section class="flexible-column-frame-column grid-8-columns align-top stacking-order-3"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png/jcr:content/renditions/cac-cal-good-cac-03-illus-dsk-v02-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png/jcr:content/renditions/cac-cal-good-cac-03-illus-dsk-v02-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png/jcr:content/renditions/cac-cal-good-cac-03-illus-dsk-v02-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png/jcr:content/renditions/cac-cal-good-cac-03-illus-dsk-v02-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png/jcr:content/renditions/cac-cal-good-cac-03-illus-dsk-v02-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of an individual in front of several monitor screens." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-cal-good-cac-03-illus-dsk-v02.png.original.png"/></picture> </div> </div> </div> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h4><span class="rte-style__body--large"><b>3. What’s the CLV to CAC ratio across different marketing channels?</b></span></h4> <p><span class="rte-style__body--medium">If the CLV to CAC ratio is less than 3:1, marketers should evaluate their CAC across separate sales and advertising channels to identify and possibly remove or optimize underperforming channels.</span></p> <p><span class="rte-style__body--medium">If their CAC for email customers, for instance, is 2:1 and their paid ads on social media platforms are 5:1, they may reallocate budgets to invest more in paid ads that offer retargeting options. They may also look at ways to reduce the CAC for the email marketing platform in the future.</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="spacer parbase section"> <div class="spacer-component spacing--4 background-color none "></div></div> <div class="flexible-column-frame parbase section"> <section id="improve-cac" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1559869522" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_1619702989" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-18" id="banner-content-container-banner_1619702989"> <div class="banner-icon"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png/jcr:content/renditions/Glossary-Term-icon-library-document-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a document with a writing utensil on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-document-01.png.original.png"/></picture> </div> </div> <h2 class="banner-headline headline-42"> Effective strategies to improve CAC over time </h2> <p class="banner-subheadline subheadline-21"> <br/> To stay competitive, marketers must consider how to scale customer acquisition and maintain or even reduce customer acquisition costs over time. Below are some strategies that can help. </p> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_2019341822" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h3><span class="rte-style__headline--medium">1. Improve customer segmentation strategies</span></h3> <p><span class="rte-style__body--large">Businesses must invest in understanding customers and segmenting their strategies or campaigns by their most profitable personas.</span></p> <p><span class="rte-style__body--large">This information can help sales and marketing teams better target audiences online, craft messaging, and develop ad or email creative that speaks directly to each segment or persona. Better segmentation can <a href="https://www.linkedin.com/help/lms/topic/a137077" rel="nofollow" style="" target="_blank">improve marketing campaign performance</a> and reduce acquisition costs through highly targeted and optimized ads or emails.</span></p> <p><span class="rte-style__body--large">To optimize creative and copy for key target segments or personas, marketers can use <a href="https://www.linkedin.com/business/marketing/blog/linkedin-ads/how-to-create-an-a-b-testing-strategy-for-your-linkedin-ads" rel="nofollow" style="" target="_blank">A/B testing</a> to identify the best combination of imagery and messaging to drive the highest campaign results (e.g., click-through rates, form completions, or social media engagement).</span></p> <p><span class="rte-style__body--large">Take the "<a href="https://www.linkedin.com/learning/marketing-customer-segmentation" rel="nofollow" style="" target="_blank">Marketing: Customer Segmentation</a>" course to learn how to better understand and target highly valued customers.</span></p> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-01-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-01-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-01-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of a computer monitor with a video on screen." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-01-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_135058996" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-02-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-02-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-02-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of LinkedIn Campaign Manager dashboard." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-02-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h3><span class="rte-style__headline--medium">2. Use analytics to optimize conversions and customer journeys</span></h3> <p><span class="rte-style__body--large">Data and web analytics tools can help marketers grow their customer base with the same or a lower CAC. Start by collecting benchmark data using <a href="/marketing-solutions/cx/21/10/reporting-analytics" target="_self">ad reporting and web analytics data</a>, and look at historical performance and visitor growth on a monthly, quarterly, or annual basis. Map that data to specific seasonal campaigns or marketing strategies.</span></p> <p><span class="rte-style__body--large">Next, look at the top web or landing pages that convert new customers from browsers to buyers or new leads via contact forms. Pay close attention to the bounce rate on those pages, and see if there are ways to improve conversions and customer journeys further into the website. The bounce rate tells marketers what percentage of people landed on the page, then left immediately to go elsewhere.</span></p> <p><span class="rte-style__body--large">If the bounce rate is high, it’s clear that something on the page was off-putting to the visitor. Visit those pages to see if there is anything obvious that needs fixing. Also, look at the page load speed. Online visitors don’t like to wait too long for pages to render on their phones or laptops, so marketers may need to <a href="https://www.linkedin.com/advice/0/how-do-you-test-optimize-your-landing-pages" rel="nofollow" style="" target="_blank">optimize pages to load faster</a> to decrease the bounce rate and boost conversion rates.</span></p> <p><span class="rte-style__body--large">For ecommerce sites, there might also be ways to increase conversions by optimizing the checkout experience. So be sure to look at the product pages and any pages a customer might visit after they click "add to cart." Also, identify where they might drop off and how to simplify the user experience. To improve conversions, refer to our course: "<a href="https://www.linkedin.com/learning/marketing-conversion-rate-optimization" rel="nofollow" style="" target="_blank">Marketing: Conversion Rate Optimization</a>."</span></p> <p><span class="rte-style__body--large">To optimize the customer journey, examine whether the copy and content on key landing or ecommerce pages provide enough information to ensure customers intuitively know what to do next. For more help, read "What is a Customer Journey Map? Key Benefits and Tools to Build Better Experiences."</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1612287043" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h3><span class="rte-style__headline--medium">3. Maximize sales and marketing costs</span></h3> <p><span class="rte-style__body--large">Look for internal sales and marketing costs that can be streamlined or reduced to increase CAC. Sales and marketing teams can also review their tech stack to identify platforms that don’t provide enough value.</span></p> <p><span class="rte-style__body--large">It might make sense to shop around for more affordable solutions that can help reduce overhead costs. For example, many <a href="https://www.linkedin.com/learning/marketing-tools-automation-14268255" rel="nofollow" style="" target="_blank">marketing automation platforms</a> can scale a team’s efforts and free up employee time to be redeployed elsewhere.</span></p> <p><span class="rte-style__body--large">Likewise, sales teams can look for solutions that optimize using their existing platforms.<br/> </span></p> <p><span class="rte-style__body--large">For instance, some CRM tools integrate well with lead generation and account management platforms like <a href="/sales-solutions/sales-navigator-b" style="" target="_blank">LinkedIn Sales Navigator</a>, which provides real-time network data that helps sales professionals personalize communications with new leads and accounts and close more deals faster.</span></p> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-03-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-03-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-03-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-03-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-03-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of an individual standing next to a webpage displaying several metrics and graphs." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-03-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_47181130" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-04-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-04-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-04-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-04-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-04-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of an individual standing next to several metrics." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-04-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h3><span class="rte-style__headline--medium">4. Add value to grow retention rates</span></h3> <p><span class="rte-style__body--large">The longer a business can retain a high-valued customer, the less they need to spend on continuously finding new ones. Increasing customer satisfaction and lifetime value is, therefore, critical for improving customer acquisition costs over time.</span></p> <p><span class="rte-style__body--large">Sales and marketing teams must continually look for ways to enhance customer service support and solutions to add value and boost retention rates. Regularly sending out open-ended customer satisfaction surveys and net promoter score (NPS) surveys on a quarterly or annual basis is an excellent way to gather feedback and benchmark customer success.</span></p> <p><span class="rte-style__body--large">Businesses can also look at product reviews on their website or third-party sites to uncover areas for improvement. Likewise, actively listen to what customers say on social media to gather intel on enhancing product and service satisfaction.</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_832861946" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h3><span class="rte-style__headline--medium">5. Develop organic growth strategies</span></h3> <p><span class="rte-style__body--large">Finally, happy customers are always more likely to recommend a product or service to a friend or share articles or videos from their favorite brands online – without ever being incentivized.</span></p> <p><span class="rte-style__body--large">Marketers must look for ways to grow their customer base organically through word-of-mouth referrals, social media, and content marketing strategies that appeal to their happiest customers. Customer satisfaction and NPS surveys will be helpful here, as well, to gather feedback on existing channel support and gauge the likelihood of product or service referrals.</span></p> <p><span class="rte-style__body--large">Also, look for ways to deepen customer relationships via loyalty programs, exclusive offers, and connecting one-on-one through social media conversations. Remember, the more responsive and human a brand appears, the more likely a customer will feel seen and heard.</span></p> <p><span class="rte-style__body--large">Refer to “<a href="https://www.linkedin.com/business/marketing/blog/social-media-marketing/how-to-grow-your-organic-following-on-linkedin" rel="nofollow" style="" target="_blank">How to Grow Your Brand’s Organic Following on LinkedIn</a>” for more tips and strategies.</span></p> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-05-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-05-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-05-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-05-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png/jcr:content/renditions/cac-effective-strategy-05-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of an individual sitting and working on their laptop with several metrics and graphs above them." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-effective-strategy-05-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> </div> </div> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="growth-potential" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_775244811" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid warm-gray-20"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-1"> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="banner_1598590022" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-default manual-content-position from-1 to-23" id="banner-content-container-banner_1598590022"> <div class="banner-icon"> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png/jcr:content/renditions/Glossary-Term-icon-library-calculate-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Icon of a line graph depicting an upward trajectory with a calculator on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/icons/Glossary-Term-icon-library-calculate-02.png.original.png"/></picture> </div> </div> <h2 class="banner-headline headline-42"> Customer acquisition costs reflect marketing growth potential </h2> <p class="banner-subheadline subheadline-21"> <br/> Knowing the customer acquisition cost (CAC) helps sales and marketing teams identify the long-term growth potential for their organization. After using the customer acquisition cost formula, businesses can also calculate their CAC to customer lifetime value (CLV) ratio to determine whether reducing acquisition or internal costs makes sense to ensure a healthier long-term profit.<br/> <br/> Various data and analytics tools can help businesses track key metrics that can influence or improve CAC over time. Be sure to regularly monitor these metrics to set a benchmark and identify areas that can be optimized or streamlined. However, there may be variations in customer acquisition cost by industry, so don’t be alarmed if your business’s average CAC is higher or lower than others in a different sector. </p> </div> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-middle stacking-order-2"> <div class="embed parbase section"> <div> <div class="image-component content-margin"> <picture><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png/jcr:content/renditions/cac-customer-acquisition-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 1025px)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png/jcr:content/renditions/cac-customer-acquisition-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 768px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png/jcr:content/renditions/cac-customer-acquisition-illus-dsk-v01-2x.png 2x" media="only screen and (min-width: 720px) and (orientation: portrait)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png/jcr:content/renditions/cac-customer-acquisition-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 767px) and (orientation: landscape)"/><source data-srcset="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png, https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png/jcr:content/renditions/cac-customer-acquisition-illus-dsk-v01-2x.png 2x" media="only screen and (max-width: 719px) and (orientation: portrait)"/><img class="image-content lazy-load" alt="Illustration of an individual sitting and working on their laptop with a large monitor and magnifying glass on the side." data-image-path="https://content.linkedin.com/content/dam/me/business/en-us/amp/marketing-solutions/images/glossary-term/terms/cac/fg/cac-customer-acquisition-illus-dsk-v01.png.original.png"/></picture> </div> </div> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_94068497" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--standard"> <h2><span class="rte-style__headline--large">Frequently asked questions (FAQs)</span></h2> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights padding-gutter light-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="light-monochrome,light-monochrome,light-monochrome,light-monochrome,light-monochrome" data-background-video-id="flexible-column-frame_1244303009" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--none" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column grid-12-columns align-top stacking-order-1"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h4><span class="rte-style__body--large"><b>1. What is customer acquisition cost vs. lifetime value (CLV)?</b></span></h4> <p><span class="rte-style__body--medium">Customer lifetime value (CLV) measures how much revenue businesses can earn from customers throughout their sales relationship. This number is used to inform customer acquisition and retention strategies, which is why many marketers evaluate CLV metrics in conjunction with CAC. We’ll explore this metric later in more detail.</span></p> </div> </section> </div> </section> <section class="flexible-column-frame-column grid-12-columns align-top stacking-order-2"> <div class="full-rich-text parbase section"> <section class="content-margin"> <div class="rich-text rich-text-mode-standard rich-text-align-left rich-text__padding--none rich-text__width--full"> <h4><span class="rte-style__body--large"><b>2. What is CAC vs. cost per action (CPA)?</b></span></h4> <p><span class="rte-style__body--medium">Advertisers sometimes confuse CAC with their cost per action or CPA metrics. While CAC measures how much it costs to acquire a new customer through all sales and marketing efforts, CPA measures how many leads are generated through specific user actions after clicking on an ad – by filling out forms to drive event or webinar signups, content downloads, or free trial sign-ups. The cost to generate CPA leads can also be factored into the total CAC calculation as part of the advertising spend.</span></p> </div> </section> </div> </section> </div> </div> </div> </section> </div> </section> </div> </div> </div> </section> </div> <div class="flexible-column-frame parbase section"> <section id="" data-anchorable class="flexible-column-frame-component layout-component has-responsive-height supports-zero-heights dark-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="dark-monochrome,dark-monochrome,dark-monochrome,dark-monochrome,dark-monochrome" data-background-video-id="flexible-column-frame_665048231" data-component-js-load-path="components/layout/flexible-column-frame"> <div class="flexible-column-frame-background background-color solid solid-dark-blue"> </div> <div class="flexible-column-frame-foreground legacy-padding-enabled has-responsive-height component__padding--default" data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false"> <div class="flexible-column-frame-heading content-margin"> </div> <div class="content-margin"> <div class="flexible-column-frame-columns"> <section class="flexible-column-frame-column "> <div class="banner parbase section"> <section id="" data-anchorable class="banner-component has-responsive-height dark-monochrome " data-responsive-height="auto,auto,auto,auto,auto" data-responsive-min-height="auto,auto,auto,auto,auto" data-enable-min-height="false" data-responsive-contrast="dark-monochrome,dark-monochrome,dark-monochrome,dark-monochrome,dark-monochrome" data-background-video-id="banner_499572310" data-component-js-load-path="components/content/banner"> <div class="banner-content content-margin component__padding--default"> <div class="banner-content-container banner-content-align-center manual-content-position from-1 to-24" id="banner-content-container-banner_499572310"> <p class="banner-subheadline headline-34"> Efficiently acquire new customers online with LinkedIn Ads </p> <div class="banner-actions"> <a class=" banner-action banner-action-primary js-analytics-event" href="/marketing-solutions/success/getting-started" title="Learn More" target="_blank" data-analytics-config="{"category":"Internal","action":"click - 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