Which metric directly measures the cost of acquiring a new customer?

• A. Click-Through Rate
• B. Cost Per Acquisition
• C. Return on Ad Spend
• D. Conversion Rate

Answer: (B)

Measuring how much you pay to acquire a new customer is the main idea here. The metric that does this directly is Cost Per Acquisition. CPA is calculated by dividing your total marketing spend by the number of new customers you gained, so it answers the exact question: what does each new customer cost you to acquire? For example, spending $2,000 to obtain 20 new customers gives a CPA of $100 per customer.

This matters because it lets you compare different channels or campaigns on an apples-to-apples basis and set efficiency targets. Other metrics don’t answer the cost question directly: Click-Through Rate measures engagement (not cost), Return on Ad Spend looks at revenue generated per dollar spent (a broader profitability view rather than cost per customer), and Conversion Rate gauges how effectively visitors turn into customers (efficiency of the funnel, not cost).