In determining lifetime value,customer acquisition costs are determined by:
A) dividing advertising costs by the number of customer transactions
B) dividing the total marketing and advertising costs by the number of new customers
C) dividing the total marketing and advertising costs by the number of total customers
D) dividing the total marketing and advertising costs by the number of customers in the database

Question

Quizplus · Accepted Answer

Customer acquisition costs are the total costs incurred in acquiring a new customer, including marketing and advertising expenses. Therefore, option B, dividing the total marketing and advertising costs by the number of new customers, is the best choice as it gives an accurate measure of the cost incurred to acquire a new customer. Option A and D do not consider the total cost, while option C divides the marketing and advertising costs by the total number of customers, which may not be relevant for determining customer acquisition cost.

In Determining Lifetime Value,customer Acquisition Costs Are Determined By