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What is our typical client acquisition cost?

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Question added by Abdul Samad Nadeem Malik , Business Support Officer , Thimar Al Jazirah - 3M ESPE
Date Posted: 2014/03/31
Rajiv Yajnik
by Rajiv Yajnik , Vice Pesident Fmcg & Sugar , EID Parry India Ltd

Hi Sir...

It depends upon the industry , hence I am giving a generalised answer..

Customer Acquisition Cost is the cost associated in convincing a customer to buy a product/service. This cost is incurred by the organization to convince a potential customer. This cost is inclusive of the product cost as well as the cost involved in research, marketing, and accessibility costs. This is an important business metric. It plays a major role in calculating the value of the customer to the company and the resulting return on investment (ROI) of acquisition. The calculation of customer valuation helps a company decide how much of its resources can be profitably spent on a particular customer. In general terms, it helps to decide the worth of the customer to the company.

Customer Acquisition Cost (abbreviated to CAC) refers to the resources that a business must allocate (financial or otherwise) in order to acquire an additional customers.

Numerically, customer acquisition cost is typically expressed as a ratio — dividing the sum total of CAC by the number of additional patrons acquired by the business as a result of the customer acquisition strategy.

Rgds

Rajiv

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