In determining lifetime value for individual customers, customer acquisition costs are determined by dividing:
A)advertising costs by the number of customer transactions.
B)total marketing and advertising costs by the number of new customers.
C)total marketing and advertising costs by the number of total customers.
D)advertising costs associated with acquiring new customers by the number of new customers.

Question

Quizplus · Accepted Answer

Customer acquisition costs are calculated by dividing the total marketing and advertising costs specifically aimed at acquiring new customers by the number of new customers acquired. This provides the cost of acquiring each new customer.

In Determining Lifetime Value for Individual Customers, Customer Acquisition Costs