Measuring Marketing

Chapter 29 Customer Acquisition Costs

Measurement Need

Marketers need to determine the cost of reaching, attracting, and acquiring the customers they are targeting.

Solution

Customer acquisition costs are the costs incurred to acquire new customers, calculated by dividing total acquisition expenses by total new customers. However, this simpler approach leaves out key details about the figures that determine an acquisition expense. Additional measures help clarify these costs. One method multiplies the number of times or frequency a marketing vehicle is used to acquire one customer by the cost of using that vehicle.

The formula for customer acquisition costs in this case is:

$C_{ac}=M\times C$

Where

Cac = customer acquisition costs

M = number ...