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What is Customer Acquisition Cost?

Customer acquisition cost is typically viewed as a decent measure of profitability since it compares the amount spent on attracting customers with the number of customers that were actually acquired during the same time period. 

Companies continually work to lower these costs and retain more of their profits. Unlike the annual recurring costs associated with retaining customers, the customer acquisition cost for a single person is recorded only once in calculations. However, it generally costs less to retain existing customers than attract new ones. 

Calculate your customer acquisition cost by dividing the total cost of your sales and marketing efforts by the total number of customers that you acquired during a specific period of time. 

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