Considerations for Determining Cost per Customer Acquisition

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If you have spent Rs.10,000 on marketing in a month and have 100 new customers, then your cost of acquisition per customer will be Rs.100.

Cost acquisition is important in evaluating the efficiency and effect of your marketing strategies while ensuring the efforts made are cost-effective.

It also helps to gain valuable insights into the financial aspects of your marketing. If your cost of acquisition per customer is higher than the customer’s lifetime value, then your marketing strategies are costly and need to be adjusted. But if your cost of acquisition per customer is lower than your customer’s lifetime value, then your marketing strategies are working efficiently, and you are gaining new customers at a profitable rate.

Determining the cost per customer acquisition varies for all industries. Various factors must be considered to influence this cost:

Marketing channels: Different marketing channels have different costs. For philippines phone number list example, if you do social media marketing, it is cheaper than paid search or SEO marketing channels. It is important to consider and analyse the cost of acquisition per customer for each marketing channel or strategy differently to find the most cost-effective option for you.
Customer retention: Cost acquisition per customer focuses on the cost of getting new customers, but also impacts customer retention. A higher cost per customer acquisition is justified if old customers purchase repeatedly. Balancing the acquisition cost with different retention strategies is also important while bringing in new customers to ensure they are here for the long term.