Photo by Christiann Koepke on Unsplash


The expense of enticing a consumer to buy a product or service is customer acquisition cost (CAC). This is important because you don’t want to be spending more to actually acquire a customer than they are spending on your product or service. 

If you’re not careful, customer acquisition can cost up to seven times more than selling to existing customers. By knowing your CAC, every business can determine how much it costs to acquire each client and adjust their strategy if needed. 

Determine your CAC by using the customer acquisition cost formula. You sum up the costs of acquiring the client, including marketing, wages, software, outsourced services, and overhead for sales, and then divide by the number of customers obtained.

Acquisition formula

For example, assume you conducted a YouTube ad campaign to acquire new consumers. In one month, you spent $850 and gained 10 new clients. You may calculate your CAC for that specific campaign as follows:

Formula:   Marketing Costs / The Number of Customers Acquired = Customer Acquisition Cost.

$850/10 = $85

You should be able to optimize your CAC now that you know how to calculate it. As long as your profit margins are high, you’re good to go! If they aren’t so much, you may need to switch up your strategy.

How do you do that? The infographic below from GetVoIP explains five unique ways to improve your CAC today. For example, creating engaging and meaningful content to build trust with your customers and warm up the sale is a great way. A company called River Pools and Spa earned 2 million in sales with a single blog post targeting a long-tail keyword its prospects were searching!

You can also use marketing automation such as chatbots and automated personalized emails and social media campaigns to boost efficiency. For example, Birchbox subscribers receive a welcome email followed by a string of emails on beauty tips and makeup tricks to build a relationship with their customers.

You can find these and more tips below. By knowing and improving your CAC, you’ll have a better idea of what new customers cost your company, and you’ll be able to implement methods to enhance these key measures.

From the Coach’s Corner, here are additional resources:

8 Ways to Get Transparency from Your Retargeting Campaign — Basically, retargeting is accomplished by using a cookie or pixel, to show banner ads to Internet users. But transparency is a significant problem for advertisers.

9 Tips to Enhance Your Customer Experience (CX) Strategy — A lot is involved to effectively shorten the time between setting your business goals and meeting customers’ needs. Here’s how to organize your customer experience strategy.

Improve Your Customer Service the Right Way with Chatbots — By scanning for keywords from a customer’s message — then replying with keywords from a database when they’re off-target — can be annoying to the recipient. Here’s how your chatbot system will enhance your customer service.

Stay Connected with Your Customers Even During a Crisis —  Despite the coronavirus, it’s best if you stay connected with your customers even from a distance. Here’s how to stay connected with them during this turmoil.

Get Year-Round Retail Customers from Your Holiday Sales — Once you attract new holiday shoppers and make them happy, it’s more advantageous to convert them to loyal customers throughout the year. It’s also easier to entice them to refer their family and friends to you. Here’s how.

“There’s no lotion or potion that will make sales faster and easier for you – unless your potion is hard work.”

-Jeffrey Gitomer


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.