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Customer acquisition cost (CAC) is the cost of winning a customer to purchase a product or service. As an important unit economic, customer acquisition costs are often related to customer lifetime value (CLV or LTV). [1] With CAC, any company can gauge how much they’re spending on acquiring each customer.
Lifetime value is typically used to judge the appropriateness of the costs of acquisition of a customer. For example, if a new customer costs $50 to acquire (COCA, or cost of customer acquisition), and their lifetime value is $60, then the customer is judged to be profitable, and acquisition of additional similar customers is acceptable.
The consumer has the additional costs of transportation, usage and eventually, disposal of the product. Together, these costs are referred to as the total customer cost (TCC). In contrast to price, which is a producer-oriented concept, TCC focuses on the consumer and includes all of the steps of the overall consumption process.
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Customer attrition, also known as customer churn, customer turnover, or customer defection, is the loss of clients or customers.. Companies often use customer attrition analysis and customer attrition rates as one of their key business metrics (along with cash flow, EBITDA, etc.) because the cost of retaining an existing customer is far less than the cost of acquiring a new one. [1]
Lead acquisition is the first, and possibly the most critical potential disconnect in the lead management process. With billions being spent on advertising expenditures, [2] in many cases the value of those expenditures is reduced because relevant information from responses is not collected or distributed.
Customer profitability (CP) is the profit the firm makes from serving a customer or customer group over a specified period of time, specifically the difference between the revenues earned from and the costs associated with the customer relationship in a specified period. According to Philip Kotler, "a profitable customer is a person, household ...
The overall scope of the CLM implementation process encompasses all domains or departments of an organization, which generally brings all sources of static and dynamic data, marketing processes, and value-added services to a unified decision supporting platform through iterative phases of customer acquisition, retention, cross-and upselling ...