How to measure Customer Acquisition Cost


Customer Acquisition Cost is the cost associated in convincing a customer to buy a product/service.

This cost is incurred by the organization to convince a potential customer.

When I sit down with a manager or business owner and I start discussing their business goals, the subject usually moves over to acquiring new customers.

We focus our efforts in not only on getting our clients new customers but we also focus on getting them better clientele.

An exercise I have them do is making sure they have their customer acquisition cost calculated in the right way.

There is a lot of confusion on how to measure that. For the most part many aspects of acquiring a customer are left out.

Sometimes just advertising is measured but the costs of a salesperson and their expenses are not measured. Way too often sales people have expense accounts to wine and dine their clients. It is important to keep a perspective of how effective every dollar spent in acquiring new clients is a dollar invested.

I work along many small and large businesses. Each organization should use the same metrics and include every item into their customer acquisition cost calculation.

So how do you calculate Customer Acquisition Cost? I can explain it in a few paragraphs but I thought I would just give you a calculator so you can do your calculation.

Were you measuring every aspect of Customer Acquisition Cost? Was the calculator helpful?