Mathematics
Md. Rashidul Hasan
Professor
Department of Agribusiness and Marketing
Faculty of Agribusiness Management
Sher-e-Bangla Agricultural University
Dhaka
Customer Acquisition Costs
Customer Acquisition Cost (CAC) is a metric that measures the total
cost incurred by a business to acquire a new customer. This includes all
expenses related to sales and marketing efforts, such as advertising,
promotions, and sales commissions, divided by the number of new
customers gained during a specific period. Understanding CAC is crucial
for evaluating the efficiency of marketing strategies and ensuring
profitability.
Customer Acquisition Costs
Customer Acquisition Costs
Customer Acquisition Costs = Total Costs of Getting New
Customers/Number Of Customers Gained
Customer Acquisition Costs
How much does it cost your business to get a new customer? To find
out, you must add all the sales and marketing expenses. Next, divide
the figure by the number of new customers in that period. If you spent
$15,000 to get new customers last month and got a new customer
every week. This means that it costs you $3,750 to get each new
customer.
Customer Acquisition Costs
Customer acquisition cost = Total Costs of Getting New
Customers/Number Of Customers Gained
= $15,000/4
=$3,750
Customer Acquisition Costs
This means that it costs you $3,750 to get each new customer.
Return on Investment
Return on investment (ROI) is a metric used to understand the
profitability of an investment. It compares how much you paid for an
investment to how much you earned to evaluate its efficiency. ROI is
generally expressed as a percentage to analyse an organization’s profit
or the earnings of different investments.
Return on Investment
ROI measures the return of an investment relative to the cost of the
investment. It is one of the most frequently used profitability metrics
due to its flexibility and simplicity.
Return on Investment
Return on Investment = (Net Profit/Total Investments) x 100
Return on Investment
SEO (search engine optimization) is the process of improving your
website to increase its visibility on search engines like Google and Bing.
PPC (pay-per-click) involves paid advertisements that appear on search
engine results pages. While SEO focuses on organic search results, PPC
is a digital advertising strategy.
Return on Investment
Marketing math skills like calculating the return on investment let you
know how much your efforts are paying off. Say you have invested
$60,000 into SEO or PPC to gain more web traffic. How did that plan
work? You could use Google Analytics to check or calculate the exact
ROI by subtracting the amount invested from your net income (during
that specific timeframe). Next, divide it by the invested amount and
multiply by 100.
Return on Investment
Say, for that month, you made gross revenue of $80,000 and spent
$60,000. You subtract $60,000 from $80,000, leaving you with $20,000.
So, $20,000/ $60,000 x 100 will give you a 33.3% ROI.
Return on Investment = (Net Profit/Total Investments) x 100
= ($20,000/ $60,000 ) x 100
= 33.3%
