So, to clarify that’s Marketing Spend/# New Paying Customers over a specific time period.
The easiest way to explain it is through an example. Let’s say you are running a candle shop. In six months, you spend $1,000 for Google PPC, $550 for a postcard mailing, $100 for an ad in the local newspaper, and $350 for a few email blasts to local community members. That’s a $2,000 marketing spend. Now, take that number and divide it by the number of new, paying customers you acquired in the same six month timeframe. Let’s say that number is 100 for simple math purposes.
That is a $20 CAC.