Customer Acquisition Cost is a crucial metric for measuring the cost to acquire a new customer, covering all marketing and sales expenses. It's vital for Product Managers to assess marketing effectiveness and drive strategic decisions, aiming to lower Customer Acquisition Cost while enhancing customer quality for sustainable growth and profitability.
Methodology:
- Aggregate all marketing and sales expenses,
- Define the acquisition period,
- Count new customers acquired,
- Calculate the Customer Acquisition Cost,
- Analyse and interpret the results,
- Optimise and refine strategies.
Benefits:
- Optimisation of marketing spend,
- Strategic decision-making for growth,
- Enhanced customer segmentation.
Limitations:
- Overemphasis on short-term costs,
- Complexity in accurate calculation,
- Potential neglect of quality quantity.