In this video, you will learn about acquisition cost.
#acquisitioncost #acquisition #wallstreetmojo #business #businesscost
Chapters:
00:00 – Introduction
00:29 – What is the acquisition cost?
02:16 – Formula
02:33 – Calculation example
03:01 – Customer retention vs acquisition cost
04:05 – Conclusion
What is the acquisition cost?
Acquisition cost refers to the expenses incurred by a company, individual, or entity to acquire something. The acquisition could be a property, land, company, or customer.
Companies need to know their acquisition costs as it is crucial from a budgeting and accounting point of view.
Different businesses can have different acquisition costs based on a lot of factors.
(Explained in detail in the video)
Formula
The formula for calculating customer acquisition cost is as such:
CAC = (Sales and marketing expense) / New customers acquired
Calculation example
We have taken an example in the video to illustrate the concept of customer acquisition cost better.
So check out the example part in the video to better understand.
Customer retention vs acquisition cost
While acquisition cost is an important metric to track, it is also essential to consider customer retention. Acquiring new customers is important, but retaining existing customers is just as crucial for long-term success.
A business needs to understand acquisition costs to determine the effectiveness of its customer acquisition strategies.
(Explained in detail in the video)
This will be all for this video. Don’t forget to subscribe to the channel, give this video a like, and share it with others.
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