The cost associated in convincing a customer to buy a product/service.
The cost of customer acquisition (CAC) means the price you pay to acquire a new customer. In its simplest form, it can be worked out by: Dividing the total costs associated with acquisition by total new customers, within a specific time period. How to calculate CAC for your ecommerce store. There are two methods for working out cost of customer acquisition: a simple (but less accurate) way and a more complex way that involves many other variables. Ultimately, there is only one way that is correct, which is the complex way. Total new customers generated in the year: 1,020,000. Customer acquisition cost: ($1,020,000 / 1,020,000 customers) + $1.00 per customer = $2.00. As in our previous example, the amount is worth only the money extracted from customers. This company has used a customer retention calculation to determine that its customer lifetime value (CLV) is $2,000. In general, this metric helps you form a more accurate understanding of what the customer acquisition cost means to your company. A $10.00 customer acquisition cost may be quite low if customers make a $25.00 purchase every week for 20 years! Customer acquisition cost is the cost associated with convincing a consumer to buy your product or service, including research, marketing, and advertising costs. An important business metric, customer acquisition cost should be considered along with other data, especially the value of the customer to the company and the resulting return on investment (ROI) of acquisition. However, in the case of this company, the average order placed by customers is $25.00, and it has a markup of 100% on all products. This means that on average, the company makes $12.50 per sale and generates $2.50 from each customer to pay for salaries, webhosting, office space, and other general expenses. In general, this metric helps you form a more accurate understanding of what the customer acquisition cost means to your company. A $10.00 customer acquisition cost may be quite low if customers make a $25.00 purchase every week for 20 years! DEFINITION of 'Acquisition Cost'. 1. The cost that a company recognizes on its books for property or equipment after adjusting for discounts, incentives, closing costs and other necessary expenditures, but before sales taxes. 2. The cost of a business to acquire a new customer. The company recognizes costs, including marketing and incentives, to introduce new customers to the company's products and services. The customer acquisition cost is calculated by dividing total acquisition costs by total new customers over a set period of time Customer Acquisition Cost, or simply CAC, refers to the resources that a business must allocate (financial or otherwise) in order to acquire an additional customer.  Customer Acquisition Cost is the cost associated in convincing a customer to buy a product/service. This cost is incurred by the organization to convince a potential customer. This cost is inclusive of the product cost as well as the cost involved in research, marketing, and accessibility costs. This is an important business metric. It plays a major role in calculating the value of the customer to the company and the resulting return on investment (ROI) of acquisition Definition. The process of persuading a consumer to purchase a company's goods or services. The cost associated with the important customer acquisition process is an important measure for a business to evaluate in combination with how much value having each customer typically brings to the business. The cost of customer acquisition (CAC) is the price companies pay to acquire new customers. In its simplest form, the CAC is determined by dividing the total costs associated with acquisition by total new customers, within a specific time period. The cost of customer acquisition is an important metric for companies to consider, along with the lifetime value of a customer. Acquiring new customers involves persuading consumers to purchase a company’s products and/or services. Companies and organizations consider the cost of customer acquisition as an important measure in evaluating how much value customers bring to their businesses.
https://www.ometria.com/blog/how-to-calculate-cost-of-customer-acquisition-coca-in-ecommerce https://blog.kissmetrics.com/customer-acquisition-cost/ http://searchcrm.techtarget.com/definition/customer-acquisition-cost https://blog.kissmetrics.com/customer-acquisition-cost/ http://www.investopedia.com/terms/a/acquisition-cost.asp http://saasmetrics.co/customer-acquisition-cost/ https://en.wikipedia.org/wiki/Customer_acquisition_cost http://www.businessdictionary.com/definition/customer-acquisition.html http://www.ngdata.com/what-is-customer-acquisition/
what is customer acquisition cost