10. Cost To Acquire A Customer CAC | $100M Lost Chapters Audiobook

In this episode, the speaker discusses Customer Acquisition Cost (CAC), a crucial metric for business owners that quantifies how much it costs to acquire a new customer. Many entrepreneurs fail to calculate their actual CAC, often only accounting for advertising spend without considering other costs like salaries, commissions, and software. This oversight can lead them to misjudge their profit margins and growth potential. The speaker emphasizes that calculating CAC is a 'hard science' and urges listeners to track their CAC monthly by marketing channel.

The episode outlines three examples of how to compute CAC for different customer acquisition strategies: outreach (email marketing), content marketing, and paid advertising. Each example breaks down the costs involved and demonstrates how to arrive at the CAC number. By understanding these calculations, business owners can identify more effective channels for acquiring customers and can strategize accordingly. The final takeaway is that if a business can't reduce its CAC, it can instead focus on increasing its lifetime gross profit per customer, thereby maximizing profitability.

The episode serves as a practical guide for entrepreneurs who want to improve their customer acquisition strategies by accurately understanding their costs.