Question

why is comparing customer acquisition cost (cac) with the average revenue per customer important?
to determine if the customer acquisition process is healthy and sustainable
to identify the total revenue generated by the marketing efforts.
to assess the overall profitability of the business.
to decide whether to increase marketing expenses.

Explanation:

• Option 1: Comparing CAC (cost to acquire a customer) with average revenue per customer shows if the revenue from a customer covers the acquisition cost, indicating a healthy/sustainable acquisition process.
• Option 2: Total revenue from marketing efforts isn't determined by this comparison (needs total customers or other metrics).
• Option 3: Overall business profitability involves more than just customer acquisition (e.g., operational costs, other revenue streams).
• Option 4: Deciding to increase marketing expenses depends on many factors beyond just CAC vs revenue per customer (e.g., growth goals, market potential).

Answer:

A. To determine if the customer acquisition process is healthy and sustainable