Customer acquisition funnel and Customer Acquisition Cost (CAC)

What is "Customer Acquisition Cost (CAC)"?

3 Answer(s)


It is the cost associated in convincing a customer to buy a product/service.


cost incurred by the organization to convince a potential customer.


Customer Acquisition Funnel is a consumer focused marketing model which illustrates the theoretical customer journey towards the purchase of a product or service.

The Five Stages of the Customer Acquisition Funnel

There are five stages to the customer purchase path. Each customer making a significant purchase, goes through each of these stages. The stages are not discrete but a continuum and the length and number of returns to any stage is situational – depending on, amongst other things, on the customer, product, price, promotion, and prestige of the salesperson.

The five stages of the customer purchase path, in order of general flow, are:

1. Awareness

2. Value Judgement

3. Purchase

4. Product Reviews

5. Socializing

Customer acquisition cost is the resource a business needs to allocate in order to acquire an additional customer.