Cost Of Acquisition

DEFINITION of 'Cost Of Acquisition'

A business sales term referring to the expense required to attain a customer or a sale. In setting a marketing and sales strategy, a company must decide what the maximum cost of acquisition will be, which effectively determines the highest amount the company is willing to spend to attain each customer.

BREAKING DOWN 'Cost Of Acquisition'

This cost is tied to marketing and sales campaigns because the more streamlined those campaigns become, the lower the customer cost of acquisition will be. Conversely, in a high-budget marketing and sales campaign, the acquisition cost may be relatively high depending on how many sales or customers the campaign draws in.

RELATED TERMS
  1. Acquisition Cost

    1. The cost that a company recognizes on its books for property ...
  2. Marketing Campaign

    Specific activities designed to promote a product, service or ...
  3. Gross Sales

    A measure of overall sales that isn't adjusted for customer discounts ...
  4. Net Sales

    The amount of sales generated by a company after the deduction ...
  5. Acquisition Premium

    The difference between the estimated real value of a company ...
  6. Outside Sales

    The sale of products or services by sales personnel who go out ...
Related Articles
  1. Investing

    What are Acquisition Costs?

    A company can recognize acquisition costs as those costs used to buy property and equipment.
  2. Managing Wealth

    How To Calculate ROI Of A Marketing Campaign

    To make the most of your marketing spend, you need to know how to measure its results.
  3. Markets

    What's an Acquisition?

    In corporate terms, an acquisition is the purchase of a company or the division of a company. Some acquisitions are paid in cash, while others are paid with a combination of cash and the acquiring ...
  4. Entrepreneurship & Small Business

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  5. Professionals

    Launching a Twitter Ad Campaign for Your Small Business

    Learn how to launch a Twitter ad campaign for your small business, and discover the best practices for optimizing your Twitter ad campaigns.
  6. Financial Advisor

    What's Involved in Customer Service?

    Customer service is the part of a business tasked with enhancing customer satisfaction.
  7. Investing

    Sales Director Career Provides Daily Challenge

    Find out what you need to do to close the deal on this investment management position.
  8. Entrepreneurship & Small Business

    How Big Data Has Changed Marketing

    Big data has enabled marketers to enhance their customer engagement and customer retention strategies by providing insight into behavior and thoughts.
  9. Investing

    Net Sales

    Net Sales is an accounting term used to analyze a company's performance. It is the sales revenue that remains after deducting for product returns, damaged or missing products, and discounts. ...
  10. Investing

    Understanding Gross Sales

    Gross sales represents the overall revenue of a company through its sales activities.
RELATED FAQS
  1. What metrics are used to gauge the effectiveness of a marketing strategy?

    Understand why companies need sound marketing strategies and how they are able to accurately measure effectiveness of marketing ... Read Answer >>
  2. How rapidly can expanding sales reduce a firm's earnings?

    In order to operate and make money, a company must spend money. Revenue - the dollar amount of sales - can be seen on a company's ... Read Answer >>
  3. What can gross sales tell you about a business?

    Learn more about gross sales and net sales. Find out what the gross sales figure reveals about a business and how investors ... Read Answer >>
  4. What is the difference between cost and price?

    Consider how cost affects a product's price. Corporate expenses and the current cost of living both impact the final sticker ... Read Answer >>
  5. How does a customer base dictate goodwill?

    Find out how a customer base dictates the value of the goodwill by providing a ready market for its products and spreading ... Read Answer >>
  6. What components are factored in determining net sales?

    Understand the key components that factor into determining a company's net sales. Learn about the underlying drivers of those ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center