What is Client Acquisition Cost?

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Client acquisition cost (CAC) is the expense associated with convincing prospects to become clients.  Acquisition costs reveal the efforts and resources involved in sourcing and recruiting potential client into the firm. This figure should also include research, advertising and entertainment expenses that are not related to or targeted at existing clients.

Understanding CAC helps to set a budget for soliciting new business.  It can also serve to refocus attention on client retention, service and support.