Acquisition cost describes a critical measurement to assess the total expense a brand or retailer will incur to gain new customers or subscribers.
Brands and retailers will adopt data-driven models to measure the acquisition cost of reaching certain audiences and make decisions on future marketing strategies to consider how to allocate investment and resources.
For example, an acquisition cost a marketing team may consider is how much to invest in advertising a particular product to a certain demographic and how profitable the outcome will be in delivering results.
Brands that are seeking to expand into new, strategic markets will evaluate data and statistics, including marketing, research, and advertising costs, to serve as a basis for making decisions on ecommerce campaigns to reach new audiences.
Teams will employ various formulas to analyze the success of marketing strategies relative to an acquisition cost and the value of gaining new customers, including comparing metrics like return on investment (ROI) and lifetime purchasing potential relative to the investment.
Brands may seek to use analytic tools or leverage a broad set of marketing approaches and channels through which they will reach new audiences, including social media platforms, email campaigns, paid advertising, and organic marketing, which can help teams to make informed decisions about how to best allocate resources to reach certain demographics.
Marketing teams can gain further perspective in an interdisciplinary sense through reaching new demographics to refine strategies and expand brand awareness while delivering more personalized commerce experiences to promote customer loyalty.