In Determining Lifetime Value for Individual Customers, Customer Acquisition Costs

question 168

Multiple Choice

In determining lifetime value for individual customers, customer acquisition costs are determined by dividing:

• A)advertising costs by the number of customer transactions.
• B)total marketing and advertising costs by the number of new customers.
• C)total marketing and advertising costs by the number of total customers.
• D)advertising costs associated with acquiring new customers by the number of new customers.

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Definitions:

Rent-Seeking Behavior

Actions by individuals or firms aimed at manipulating the political or economic environment to acquire unearned income or profits.

Principal-Agent Problem

A conflict in priorities between a person or group making decisions on behalf of others (agent) and those who are affected by those decisions (principal).

Computer Software

Programs and other operating information used by a computer, enabling it to perform specific tasks and functions.

Legal Documents

Official papers that record agreements, rights, or responsibilities, which are enforceable by law.