Question

a hair salon acquired 100 new customers last year.
costs in the marketing and sales areas were the following:

• marketing costs = $1,000
• sales costs = $10,000
• salaries = $96,000

what was the customer acquisition cost?
options:
$1,070
$11,000
$110
$107,000

Explanation:

Step1: Sum all acquisition costs

Acquisition costs include marketing, sales, and salaries. So sum them: \(1000 + 10000 + 96000\)
\(1000+10000 = 11000\); \(11000 + 96000 = 107000\)

Step2: Divide by number of new customers

Customer acquisition cost (CAC) is total costs divided by number of new customers. Number of new customers is 100. So \( \frac{107000}{100} = 1070 \)

Answer:

\$1,070