Customer acquisition cost


Customer Acquisition Cost is the cost of winning a customer to purchase a product/service. As an important unit economic, customer acquisition costs are often related to customer lifetime value.

Calculating Customer Acquisition Costs

There is a simple and complex method for calculating acquisition costs.
Simple Method
The simple method divides the total marketing costs to acquire new customers by the total number of customers acquired in a defined period.
Complex Method
In addition to the costs incurred in marketing, the complex method includes sales and marketing wages, software costs for sales and marketing, all additional professional services such as designers, consultants, etc., as well as other overhead costs.

Customer acquisition costs in relation to customer lifetime value

Customer lifetime value expresses the monetary value that a customer is worth to the company in the course of a customer relationship. If the ratio of LTV to CAC is now calculated, different values can result.

Customer acquisition costs in the environment of start-ups and [venture capital]

In the approach and review phase of venture capital companies to start-ups, the CAC and LTV ratios are of great importance. They show venture capital firms such as Accel Partners, Bessemer Venture Partners or Matrix Partners the efficiency of the start-up business model.