Question

You know that the Customer Acquisition Cost is the cost associated with convincing a customer to buy a good or service. It includes the product, research, marketing, and accessibility costs. You also know that it equals the marketing expenses per month divided by the number of new customers per month.
You have determined that two certain groups of customers are the largest groups of buyers. You want to know which group will be more profitable to target in terms of marketing. You check the company’s big data and find that the marketing expense per month for targeting the first group is $30,000, while the second group requires $60,000. You estimate that this marketing campaign will be able to attract 1,000 new customers for demographic group 1 and 1,500 for demographic group 2.
A B C
1 Marketing Expenses Number of Customer
for Targeting Customers Customers Acquisition Cost
2
What is the Customer Acquisition Cost for each customer in demographic group 1?
a. $50.
b. $40.
c. $30.
d. $60.
What is the Customer Acquisition Cost for Group 2?
a. $80.
b. $40.
c. $60.
d. $100.

Answer 1

Answer:

The Customer Acquisition Cost for each customer in demographic group 1

The correct option is c

The Customer Acquisition Cost for Group 2

The  correct option is  b

Step-by-step explanation:

From the question we are told that

The marketing expenses per month for targeting the first group is $E = \ 30,000$

The marketing expenses per month for targeting the second group is $F = \ 60,000$

The number of customers for the demography of group 1 that will be attracted is N = 1000

The number of customers for the demography of group 2 that will be attracted is M = 1500

Generally the customer acquisition cost for group 1 is

$K = \frac{E}{ N}$

=>   $K = \frac{30000}{ 1000}$

=>   $K = \ 30$

Generally the customer acquisition cost for group 2 is

      $Z = \frac{F}{ M}$

=>   $Z = \frac{60000}{ 1500}$

=>   $Z = \ 40$