A hair salon acquired 100 new customers. Marketing costs = $1,000; Sales costs = $10,000; Salaries = $96,000. What is the customer acquisition cost?

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Multiple Choice

A hair salon acquired 100 new customers. Marketing costs = $1,000; Sales costs = $10,000; Salaries = $96,000. What is the customer acquisition cost?

Explanation:
Customer acquisition cost is found by dividing the total amount spent to acquire customers by the number of customers gained. In this scenario, the spend specifically aimed at acquiring customers is the sum of marketing and sales costs: 1,000 + 10,000 = 11,000. With 100 new customers, CAC = 11,000 / 100 = 110 dollars. Note that some definitions include salaries as part of acquisition costs, which would raise the total to 107,000 and CAC to 1,070, but this question follows the approach of excluding salaries, so 110 is the best choice.

Customer acquisition cost is found by dividing the total amount spent to acquire customers by the number of customers gained. In this scenario, the spend specifically aimed at acquiring customers is the sum of marketing and sales costs: 1,000 + 10,000 = 11,000. With 100 new customers, CAC = 11,000 / 100 = 110 dollars. Note that some definitions include salaries as part of acquisition costs, which would raise the total to 107,000 and CAC to 1,070, but this question follows the approach of excluding salaries, so 110 is the best choice.

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