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hey everyone eric here in this video were gonna breakdown customer acquisition cost by the end of this video youll understand both how to calculate cac and its variations as well as what digital marketers and venture capitalists are trying to understand when they talk about cac specifically at startups that are scaling rapidly ok lets get started so at a very high level customer acquisition cost we call it cac is just how much the company needs to spend in advertising to get one new customer to buy for their first time and the reason this is important is because if you know what your customer lifetime value is and so this is basically all of the purchases on average will make during their lifetime or their relationship with your company then you can compare that to your marketing costs on that first order to try to figure out whats the maximum we can spend in marketing to bring a new customer into the company and still make money on our relationship so lets say you expect a custome