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Customer Acquisition Cost in Product Management

Customer Acquisition Cost (CAC) refers to the total cost of acquiring a new customer, including all marketing and sales expenses. It is a critical metric for product managers to understand and optimize, as it directly impacts the profitability of the product. Effective management of CAC involves strategic marketing, efficient sales processes, and continuous analysis and improvement.

Example

Uber uses targeted promotions and referral bonuses as part of its strategy to manage CAC. By analyzing the effectiveness of these tactics, Uber can optimize its marketing spend to acquire new users more efficiently.