CUSTOMER ACQUISITION COST Definition

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CUSTOMER ACQUISITION COST is calculated by dividing total acquisition expenses by total new customers. However, there are different opinions on what constitutes an acquisition expense, e.g. rebates and special discounts do not represent an actual cash outlay, yet they have an impact on cash (and, presumably, on the customer). There is no set standard, i.e. acquisition costs vary across industries. When acquisition data is available, it is best to try to determine if you are comparing apples to apples. This is not easy, as customer acquisition data is usually scarce and the methodology is often questionable.

Learn new Accounting Terms

APE is Account Period Ending (Normally followed by the date the accounting period ends). See also Accounting Period.

LEMONS AND PLUMS, in finance, LEMON is an investment with a poor or negative rate of return; and, PLUM is an investment with a healthy rate of return.

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