What is John's Customer Acquisition Cost (CAC) if he spent $10,000 on marketing and $6,000 on sales to acquire 2,000 new customers?

To determine John's Customer Acquisition Cost (CAC), you first need to add together all the expenses related to acquiring new customers, which includes both the marketing and sales costs. In this scenario, John spent $10,000 on marketing and $6,000 on sales.

When you combine these expenses, you get a total acquisition cost of $10,000 + $6,000 = $16,000. This total amount reflects the overall investment made to gain new customers.

Next, you need to divide this total by the number of new customers acquired. John gained 2,000 new customers. Therefore, the formula for CAC is:

CAC = Total Cost of Acquisition / Number of New Customers

CAC = $16,000 / 2,000 = $8

This calculation indicates that the Customer Acquisition Cost for John is $8 per customer, making this the correct choice. Understanding this concept is crucial in evaluating the effectiveness of marketing and sales strategies, as it helps assess how much a business is spending to acquire each new customer relative to their potential lifetime value.