EPISODE 265

EP 265: What Is Customer Acquisition Cost?

December 30, 2021 Bobby Klinck
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In this episode, we’re talking about what customer acquisition cost is and why it matters for your online business. This conversation is a continuation of the last episode about another metric that you need to know: customer lifetime value. 

If you’re going to build a successful business, then your customer lifetime value must be higher than the cost to acquire a customer. Let’s look at the specifics of how to find this metric.

What You'll Learn in Today's Episode

  • Customer acquisition cost is the average cost of all the front end sales and marketing efforts from when someone becomes aware of your brand to the point that they buy divided by the total number of customers
  • If customer lifetime value > customer acquisition cost, you’re in a good place
  • Why you need to understand all the costs involved in acquiring a customer and not just paid ads
  • Examples of the costs that should be allocated to customer acquisition cost
  • Why it’s important to calculate the cost of customer acquisition for your different marketing channels
  • How to use the information you gather from looking at your customer acquisition cost

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