Customer Acquisition Cost:

Customer acquisition cost is the total expense required to convert one lead from a prospect to a paying customer. 

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This includes expenses for advertising, public relations, content production, and audience research. It’s an important metric for ensuring a company is not overspending on marketing activities. As such, it works best when monitored in conjunction with other metrics, such as return on investment (which is closely related).

Calculation

Divide the amount spent on efforts to attain customers by the number of paying customers gained over that same timeframe.

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