In the last installment of our Mastering the Metrics series, we covered Cost Per Order. Today, we’ll be discussing a related metric called Cost Per Customer Acquired.
Cost Per Customer Acquired measures the cost-effectiveness or ROI of advertising by dividing total advertising cost by the number of customers acquired. Cost per customer acquired goes a little deeper than cost per order in that it conceptualizes customers not just as a single order, but as a possible source of multiple orders. This metric helps marketers determine if customers are worth the cost of their acquisition and is useful for comparing to customer lifetime value.
Advertising Cost / # of Customers Acquired = Cost Per Customer Acquired
