Customer acquisition cost is simple to calculate and easy to calculate flatteringly. Leaving out the salaries, counting the wrong customers, or averaging across channels all produce a number that says everything is fine.
Customer acquisition cost is the total spent on winning customers in a period, divided by the number of customers won. Both halves of that sentence hide decisions, and the decisions are where the number becomes either useful or comforting.
The flattering version counts only advertising spend and every new name in the database. The honest version counts everything spent to make acquisition happen — including the people doing it — and only customers who actually paid. The gap between the two is frequently a factor of three, which is enough to make a losing channel look profitable.
Include the salaries. A two-person business spending 5 000 a month on ads and half of somebody's time is not acquiring customers for the price of the ads, and calculating as if it were is how a channel that loses money survives for a year. If the objection is that the person would be paid anyway, the answer is that their time has an alternative use, and the arithmetic exists to compare uses.
The widely quoted target is a lifetime value at least three times acquisition cost. It is a reasonable rule of thumb for a funded software business and a poor one for everybody else, because lifetime value is a projection and acquisition cost is money that already left. A ratio of three built on an optimistic five-year lifetime can still bankrupt a business that has to pay the cost this month and collects the value over years. For a small business the more useful pair is payback period and gross margin: how long until the cost is recovered, and how much of each sale is available to recover it.
Ettex CRM holds where customers came from and what they bought, which is what makes a per-channel figure possible at all; the spending side comes out of Ettex Books; and the arithmetic sits in Ettex Sheets where you can rerun it by channel and by quarter.
Being clear: there is no attribution model, no ad platform integration and no automatic cost import. The source of each customer is a field somebody fills in, and for most small businesses a recorded answer to how did you hear about us beats an inferred one from a tool nobody has configured.
Total spent on winning customers in a period, including sales and marketing salaries, divided by the number of new paying customers in that period. Split it by channel to make it useful.
Yes. In a small business the time spent on acquisition is usually the largest cost, and excluding it makes unprofitable channels look profitable.
Three to one is the usual quoted target and suits a funded subscription business. For a small business, payback period and gross margin matter more, because the cost is paid now and the value arrives later.
Because the blended number averages a cheap channel with an expensive one and recommends more of both. Every acquisition decision is per channel.
Customer lifetime value is a projection, and projections flatter. Calculated on margin rather than revenue, over a horizon you can defend, it becomes the most useful number in the business — and the most easily abused.
Most small-business loyalty programs discount people who would have come back anyway. The ones that work change behaviour — frequency, basket size, or the reason to choose you over the shop next door.
A sales plan template is not a forecast. The forecast says what you expect to close; the plan says who will do what, to whom, how often, to make that number arrive rather than merely be predicted.