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Glossary
Glossary

Acquisition Cost

Acquisition cost relates the expenses incurred to the number of new customers acquired within a defined scope. In referral programmes, it includes rewards as well as attributable operating costs. Validation, cancellations, and the quality of acquired customers influence the interpretation of the result.

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A concrete example

A fictitious operation costs €12,000 and brings in 120 new validated customers: its average acquisition cost is €100 per customer.

A point to consider

Dividing by leads instead of customers changes the metric. Include reward, media, and processing costs defined in your scope.

Compare customers of comparable quality

Specify when a customer is considered acquired: validated contract, confirmed purchase, or other business event. Then compare the acquisition cost to the margin and retention of these customers. A campaign that is less expensive per sign-up may become more expensive per retained customer. Analyze new customers and returning customers through the referral channel separately.

Questions to ask your team

  • Were cancellations removed from the number of acquired customers?
  • Do the compared channels include the same cost categories?

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Glossary 2 min

Customer Value

Customer value estimates the expected economic contribution of a relationship over time. Depending on the model, it incorporates revenue, margin, costs, and probability of continuity. It is based on assumptions that must be documented. It helps to prioritize investments, without constituting an individual certainty about the future.

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