Blog

What is Customer Acquisition Cost? Why Does it Matter?

Apr 4, 2022 | Marketing

Marketing Blog

​As a business owner, how do you determine the price of a new customer? Between marketing campaigns, events, advertising, and referrals, what are you spending on each new client? And more importantly – how can you reduce that cost to get more customers for less? If you’re guessing or want to know how to make changes that can increase your profits, you need to determine your customer acquisition cost and how it affects your bottom line. Let’s dig in.

How Do You Measure Customer Acquisition Cost?

First things first. Customer acquisition can be calculated in what’s known as the customer acquisition cost (CAC). It’s important because it assigns a real value to your marketing efforts and helps accurately measure the ROI for your business. The formula for customer acquisition cost (CAC) is the marketing cost (MC) divided by the number of customers acquired (CA):

CAC = MC / CA

Simple, right? Even those of us who aren’t math majors can handle that. Depending on how you manage your marketing, consider including wages for marketing and sales, outsourced services, overhead for marketing and sales, and other expenses your business has when determining customer acquisition cost.

How Can You Minimize Your Customer Acquisition Cost?

Remember – you can always do better! No matter how well your business is doing, there is always room for improvement. How? By improving messaging, connecting with new audiences, and trying new avenues for marketing.

Make Your Website Work for You.

Take a good hard look at your website. Are your call-to-actions effective? Is your website mobile and tablet responsive? Do your landing pages make sense and encourage people to connect with you? Is your copy clear and make sense to the reader? Make the experience as simple as possible and your consumers will thank you.

Don’t Neglect Current Customers

Your clients are your key to success, so focus on them too. As discussed before, it costs five times more to acquire a new customer than it does to obtain a new one. There are many simple strategies to keep your clients focused on our business and increase employee retention. Plus, it will decrease your overall cost of customer acquisition.

Outsource Your Customer Acquisition

Get the most bang for your buck. If you want to reduce your customer acquisition cost, most businesses find that outsourcing is their best option. Consider the advantages of having a customer acquisition team doing all the tedious and consuming research, implementation, and metrics tracking for you. Plus, there are many other benefits to outsourcing your customer acquisition – like achieving consistent ROI, generating clear customer data, minimizing your customer acquisition costs, and more.

Check out 5 Customer Acquisition Strategies You Can Leverage This Year

The Bottom Line

Your customer acquisition cost is the heartbeat of your company. Reducing your CAC can mean higher revenues and greater profitability. If that solution is outsourcing your customer acquisition needs to a professional firm, LeadingResponse is here to help. With over 25 years of experience, we can help set your business on a path to success. Our marketing experts are always available to provide free consultations on the best solutions for your business. Let’s get started.

Popular Topics
A dart sits at the bullseye of a target on a desk, next to a laptop, glasses, pen, and notebook.
Apr 11 2024

How LeadingResponse Delivers Quality Legal Case Leads

Having the right tools at your disposal can make all the difference in your legal marketing efforts. LeadingResponse offers cutting-edge legal...
A stethoscope and a card that reads 'medicare' sit on a yellowish green background.
Apr 06 2024

Medicare 2025: Your Guide to the Latest Changes and What They Mean for You

CMS just rolled out the latest on Medicare Advantage (MA) and Part D Payment Policies for 2025. Here’s what these changes mean for you and...
Business men sitting at a desk, going over graphs and financial reports.
Mar 28 2024

10 Creative Marketing Ideas for Financial Advisors

How do you effectively market your services as a financial advisor and stand out in a competitive landscape? In this blog post, we’re going to...
Man with a crutch meets with and shakes hands with his personal injury attorney
Mar 14 2024

5 Tips for Your Personal Injury Marketing Plan

A well-crafted plan can set you apart from the rest. To help you achieve this, here are five crucial tips to consider when developing your personal...
Financial advisor works on his phone, with metrics out on his desk. His phone glows with light bulb, productivity, and growth icons.
Feb 01 2024

Unlocking Growth: The Crucial Role of Marketing for Financial Advisors

Finding clients as a financial advisor can be complicated. In an era marked by dynamic shifts in the financial services sector, the need for...
Formal handshake
Jan 22 2024

Unlock Success: Your Guide to Outsourcing Legal Marketing

Effective lead generation is essential for business strategy and cash flow and plays a pivotal role in supporting the financial growth of your...
Young black woman speaking into a podcast microphone
Jan 17 2024

2024 Performance Marketing Trends to Watch

For those who are well-versed in performance marketing and want to know more about marketing trends, keep reading fort the anticipated marketing...
Close up of estate planner shaking hands with new client
Jan 15 2024

5 Tips To Get High Quality Estate Planning Leads

Estate planning leads is a niche market, and knowing how to find the right prospects can be daunting. If you’re ready to see a significant...
Get More Leads
Jan 08 2024

The Hottest Mass Tort Leads for 2024

Is your law firm looking to expand this year? If so, then lead generation should be your top priority. Getting the best legal leads doesn’t have to...
Man draws his business growth rising
Jan 04 2024

5 Ways to Improve Conversion Rates in Client Acquisition

Discover 5 effective strategies to boost conversion rates in client acquisition. Learn how to optimize your marketing efforts and maximize...
Professional woman sits on a chair to the right, in front of a large yellow wall. Drawings display "PPC" and internet connectivity symbols to the left.
Dec 28 2023

The Ultimate Guide to PPC Advertising Best Practices

Pay-Per-Click (PPC) advertising, aka search engine marketing, is a potent tool for digital marketing. With PPC ads, businesses can reach more of...
Professional man works on his laptop keyboard, a pen in his hand as he types. An internet search bar is over the image.
Dec 20 2023

A Comprehensive Guide to Search Engine Marketing

In today’s online-driven world, businesses compete to capture the attention of their target audience with more and more competition each...
w

Now is the time to grow your business for tomorrow. Ready to get started?

We respect your right to privacy.