How to calculate the cost of customer acquisition?

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The general formula for CAC is:

How to Calculate Customer Acquisition Cost

The amount of expenses is calculated individually kenya email list for each case. The extended formula looks like this:

The expanded formula looks like this

MCC – the total amount of money spent on advertising;

W – salary of marketers;

S – payment for the programs and services involved;

PS – expenses for the services of third-party professionals: PPS specialists, SEO optimizers, copywriters, programmers, SMM specialists, etc.;

O – overhead costs: office equipment, office supplies, web hosting fees, etc.;

CA – the number of leads that were attracted.

It is rational to calculate the cost of a client for each promotion channel. This will allow you to identify the most effective sources of leads and redistribute the advertising budget in accordance with the results obtained. After all, if you invest more money in the cheapest channels, you can attract many more clients.

What is the optimal cost to attract a client?
The results should be interpreted in accordance with the size of the business and the average check. A CAC of $45 will be a failure with an average of $48 and fantastic with a check of $500.

Please note! It is a mistake to compare customer acquisition costs with the order amount. A lead that you attracted once may make several purchases in their lifetime. Therefore, it is more correct to compare CAC with LTV – the profit that the customer brings in over the entire period of working with them.

What is the optimal cost to attract a client?

Lifetime is a metric that shows how long a user is a regular consumer of a product;

ARPU – average profit from one client over a period.