Acquisition Cost

All marketing, advertising, and direct mail expenses associated with securing a new customer.

Implications

Important in marketing and sales, particularly when evaluating the efficiency of customer acquisition strategies. Used in budgeting and ROI analysis.

Example: A telecom company calculates the acquisition cost of new customers via online ads versus traditional media to optimize its marketing budget.

Different from customer lifetime value, which focuses on the revenue a customer generates rather than the cost to acquire them.