Erin spent a total of $7,000 to acquire 700 new customers. What is her Customer Acquisition Cost (CAC)?

To determine the Customer Acquisition Cost (CAC), you need to divide the total amount spent on acquiring customers by the number of customers acquired. In this case, Erin spent $7,000 to acquire 700 new customers.

The calculation would be:

Customer Acquisition Cost (CAC) = Total Cost / Number of Customers

CAC = $7,000 / 700 = $10

This shows that Erin's CAC is $10, which means she spent ten dollars to acquire each new customer. Understanding CAC is crucial for businesses as it helps to assess how efficiently they are acquiring customers and to evaluate the return on their marketing and sales investments. Lowering CAC while maintaining or increasing customer quality can lead to improved profitability.