Question

Calculate the cost of gaining one customer for a company using the following information: A sales call costs $250. It takes 5 calls to gain a customer. The profit margin is 10%. Average customer revenue is $5,000. Number of years loyal is 3.

A. $125
B. $250
C. $1,200
D. $1,250
E. $2,500

Answer 1

The cost to gain one customer is calculated as the cost of a sales call multiplied by the number of calls needed, which totals $1,250.Hence, the correct answer is option D.

Step-by-step explanation:

Calculating the Customer Acquisition Cost

Understanding customer acquisition cost is crucial for any business to evaluate the effectiveness of its marketing efforts. In this scenario, we calculate how much the company spends to acquire one customer. We know that each sales call costs $250, and it takes 5 calls to gain a customer. Therefore, the total cost of making those calls is 5 multiplied by $250, which equals $1,250.