You may already be measuring the cost of each new customer based on your marketing spend. Marketing certainly plays a central role in your customer acquisition cost (CAC). However, to truly understand your CAC, you have to include all the money you spend on marketing, lead nurturing, and sales. This could include everything from the cost of your sales team to your monthly marketing expenses. It could even include your phone bill.
Calculate your basic CAC by dividing all of the capital you’ve spent on acquiring new customers by the number of customers you’ve acquired:
You can also plot your data on a graph over time to see trends.
If you are incurring too many costs for each customer, look your internal processes. Your customer acquisition cost benchmark isn’t just a reflection of your marketing health. In fact, there are 3 ways your customer acquisition cost matters to your business.