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Customer Acquisition Cost
Marketing and other expenses needed to turn a prospect into a customer.
Implications
The total cost associated with acquiring a new customer, including marketing, sales, and onboarding expenses, used to assess the efficiency of customer acquisition strategies and the overall profitability of customer relationships.
Example
Example: A SaaS company calculates its customer acquisition cost by dividing total marketing and sales expenses by the number of new customers acquired during a specific period, helping to optimize its marketing spend.
Related Terms
Different from customer lifetime value, which measures the total revenue from a customer over time, customer acquisition cost focuses on the initial expense of gaining that customer.
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