The marketing and sales budget of Wilson Inc.is estimated to be $250 million.It has retained 450,000 customers and acquired 100,000 new customers.The marketing administration cost of the company is $90 million.If the retention cost per customer is $75,calculate the acquisition cost per customer.

Question

Quizplus · Accepted Answer

Total cost of retaining customers = Retention cost per customer x Number of retained customers
Total cost of retaining customers = $75 x 450,000 = $33,750,000

Total marketing and sales budget = Retention cost + Acquisition cost + Marketing administration cost
$250 million = $33,750,000 + Acquisition cost + $90 million

Acquisition cost = $250 million - $33,750,000 - $90 million
Acquisition cost = $126,250,000
Acquisition cost per customer = Acquisition cost / Number of new customers
Acquisition cost per customer = $126,250,000 / 100,000
Acquisition cost per customer = $1,262.5

Therefore, the acquisition cost per customer is $1,262.5. Option B is the correct answer.

The Marketing and Sales Budget of Wilson Inc