What it costs to win a customer.
WHAT TO CALCULATE
All money spent attracting customers in a period Divided by customers gained in that period
WHAT TO INCLUDE
Advertising Content and marketing effort Commissions Your own time, at a realistic rate
THAT LAST ONE
Usually omitted, and usually the largest component in a small business.
WHAT TO CALCULATE BY SOURCE
Cost per customer from each channel.
WHY
It shows where money is well spent and where it is not.
WHAT THAT REQUIRES
Recording how each customer found you.
Which is why that field matters.
WHAT TO COMPARE IT AGAINST
Customer value.
WHAT THE RELATIONSHIP TELLS YOU
Whether to spend more, less, or differently.
WHAT TO WATCH
Acquisition cost rising while value stays flat.
That is a margin problem arriving.
WHAT TO DO ABOUT AN EXPENSIVE CHANNEL
Improve conversion before abandoning it.
WHAT TO REVIEW
Quarterly.
