Enjoy. Startup Killer: the Cost of Customer Acquisition | For Entrepreneurs , February 2, 2010 Looks at the critical equation around customer acquisition cost vs. Of course, one of the best ideas around this is to have Negative Customer Acquisition Costs . Here are some recent great posts that I’ve come across that generally fall in the intersection of startups and CTOs. customer lifetime value similar to what I discussed in Startup Metrics but in more depth.

Our new customer acquisition has grown and our costs have plummeted. We are actually getting paid now to obtain customers, so our customer acquisition costs are now negative. A negative customer acquisition cost! I’ve recently had a chance to reconnect with Eric David Greenspan ( LinkedIn , Twitter ) He’s the CEO of Make It Work a high quality, personal, high touch technology service provider for homes and small businesses. He’s done several startups and is a board member of the Technology Council of Southern California (which is where I met him originally).

In many cases, I can break it down into: Customer Acquisition Cost – how will you reach prospects, how will you convert them and how much will it cost to convert them Customer Lifetime Value – how much will you make off of each converted customer This very simple model works for a surprising number of business models. We'll need to look at different customer acquisition channels, figure out how they are converting, and the expected lifetime value of customers acquired through those channels, and apply cost to those channels. A post by Fred Wilson pointed me to Dave McClure's Startup Metrics presentation.

According to Eric Brandt, Senior Vice President and CFO of the firm on a call Monday, it is looking for acquisitions as opportunities arise. However, the firm said its corporate acquisition strategy hasn't changed: it's looking for good quality engineering teams, companies that accelerate its time-to-market, enhances its competitive position, and if an acquisition would be accretive to its revenue growth. Irvine-based Broadcom is eyeing technology companies it can buy at a bargain, the firm's CFO said on an analyst call this week. On the conference call, Brandt said that

Calabasas-based Ixia reported this morning that it has completed its acquisition of Agilent Technologies' Data Networks Product LIne. Tags: ixia agilent merger acquisition testin The deal was worth approximately $44M in cash plus assumption of certain liabilities. Ixia had said it would acquire the Agilent product division last week.

Medtronic said Friday that its $225M acquisition of Carlsbad-based Ablation Frontiers has completed. Tags: merger frontiers acquisition medtronic ablatio Medtronic said that it would acquire Ablation Frontiers in January, for $225M plus potential additional milestone payments. Ablation Frontiers will become part of Medtronic's Cardiac Rhythm Disease Management business.

According to Autobytel, the bid--from Infield Acquisition, Inc., Tags: autobytel merger acquisition trilogy automotiv Irvine-based Autobytel , which operates a number of online sites focused on buying and selling cars, said late Tuesday morning that the firm has received an unsolicited offer to acquire the company. Trilogy Enterprises, Inc.

Microsoft, which announced its acquisition of DATAllegro in July, said that it will retain most of DATAllegro's team and headquarters in Aliso Viejo, and make it a "Center of Excellence" for data warehousing. Financial terms of the acquisition have not been disclosed. Aliso Viejo-based DATAllegro is now officially part of Microsoft, Microsoft said Tuesday, and will become part of Microsoft's SQL Server offering. DATAllegro's CEO, Stuart Frost, remains with Microsoft, as well as what Microsoft describes as a majority of its key executives.

DemandTec originally announced the acquisition in January. Tags: merger marketing acquisition demantec software connect3 advertisin Cerritos-based Connect3 , a developer of advertising, merchandising, and promotions software, is now officially part of DemandTec, a Bay area firm that develops promotional planning software. Financial terms of the deal were not disclosed.

San Diego-based insurance software firm Confirmnet is now officially part of Ebix, a provider of software for the insurance industry, Ebix said Monday afternoon. Ebix had announced the buy in early November, saying that the deal was worth between $10M and $11M. Confirmnet develops software used for issuing insurance certificate