Customer Acquisition Accounting Measures

Top management is often surprised by the costliness of customer acquisition. How does the firm benchmark initial acquisition measures? Basic knowledge of acquisition costs, initial profit to cost ratios, and new customer investment statistics should provide management with a better understanding of their business. To help you get started we outline the purpose, value, required inputs for computation, and mathematical computation for several key acquisition metrics. As these measures become more widely used, firms can benchmark versus other firms in similar industries.

Cost of Acquiring a Customer
Total Customer Acquisition Cost
Ratio of Initial Profit per Customer to Cost of Acquiring a Customer
New Customer NPV