barry owns a small business. he spent $15,000 on marketing expenses and $5,000 in sales costs last year. he…

barry owns a small business. he spent $15,000 on marketing expenses and $5,000 in sales costs last year. he obtained 1,000 new customers. what is his customer acquisition cost (cac)?

barry owns a small business. he spent $15,000 on marketing expenses and $5,000 in sales costs last year. he obtained 1,000 new customers. what is his customer acquisition cost (cac)?

Answer

Explanation:

Step1: Calculate total cost

The total cost for customer - acquisition is the sum of marketing and sales costs. Marketing cost is $15000 and sales cost is $5000. So the total cost $C = 15000 + 5000=20000$.

Step2: Calculate customer - acquisition cost

The customer - acquisition cost (CAC) is the total cost divided by the number of new customers. The number of new customers $n = 1000$. So $CAC=\frac{C}{n}=\frac{20000}{1000}=20$.

Answer:

$20$