The Cost of Acquiring a Customer

Working out this number seems simple enough. Bendle et al. (2016) Simply states that you divide the amount spent on acquisition efforts by the amount of customers acquired will give you the cost of each.

Why is this important?

If this number can be calculated, the financial standing, on paper, becomes simple for a business to be profitable. Ensure that this cost is less than the value a new customer will provide to the organisation and it is a simplified formula for success.

To calculate the value a new customer can provide, Bendle et al. (2016) suggests using prospect lifetime value or PLV. This does require the customer lifetime value which has been discussed in previous blogs.

PLV allows an organisation to estimate the value of customers and in some cases segment these to provide a tiered valuation which can identify primary targets etc. From here, an informed decision can be made as to focus on customer retention if the value is low and cost is high of new customer prospects.

In the case of the PLV being high, this will allow an organisation to estimate their acquisition budget to ensure their efforts remain profitable.

This becomes a key metric in marketing strategy to verify the viability of success or at least add accuracy to strategic decisions to improve the likelihood of success.


Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey


Marketing Metrics for Customer Feedback

Customer feedback is essentially their perception of the product or service you offered, it can be influenced by their expectations but the measurement is taken proceed their consumption of your offering.

These metrics indicate how happy the customer was with the organisation’s market offering. Bendle (et al. 2016) include customer satisfaction, willingness to recommend, net promoter score in their customer feedback metrics.

Customer Satisfaction

Is expressed as a percentage that reflects how many customers had their expectations exceeding the pre-determined satisfaction goals (Bendle et al. 2016). A high satisfaction percentage can be a good indication of future purchase while any dissatisfaction may bring to light issues that may need to be addressed. There can be some issues with accuracy as there is with any survey data.

Willingness to Recommend

As it may sound, this metric reflects the customers who indicate they would recommend the product/service to family of friends and is collected through survey data (Bendle et al. 2016). It is hard to measure the flow on effect but it does reflect a higher level of loyalty and word-of-mouth marketing can be extremely effective.

Net Promoter Score (NPS)

This is an additional means of measuring willingness to recommend. This is a relatively simple means that compares the scores of respondents with 9-10 in contrast with those scoring 6 or below to come out with a net score. The end percentage, if positive reflects a good level of satisfaction but 0% can simply mean equal advocates and negative respondents. The other flaw to this measure is the inability to indicate causes of poor satisfaction and simply diagnoses when it occurs (Bendle et al. 2016).


Bendle, NT, PW Farris, PE Pfeifer & DJ Reibstein (2016) Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance, 3rd edition. Pearson: New Jersey