How much does each new customer cost your business? Businesses love to dump money into Google AdWords campaigns, but then they ignore what the results are telling them. A lot of companies are spending more on a acquiring a new customer than that customer is giving them in return. Cost per acquisition is a valuable statistic for understanding whether you’re actually getting something for all the money spent in advertising.
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customer lifetime value
Understanding the Value of Your Customers
Most business owners know the average purchase amount they get from their customers (amount of sales divided by the number of purchases), but few bother to understand how much value customers give over the lifetime of their relationship with the company. Advertising and marketing is vital to the growth of any company, but knowing how much a customer is likely to spend while they’re doing business with you is important for setting the proper budgets (and expectations).
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