It’s called the cost of customer acquisition (CoCA), and it’s a critical metric for growing and maintaining your profitability.

Calculating your CoCA (the average amount of sales and marketing expenses you invest to acquire a single customer) can be as easy as adding up your sales and marketing costs and dividing it by the number of new customers you have during a given period.

But that's oversimplifying it.

Sure, advertising costs and pay-per-click fees are easy to add up, but do sales and marketing costs include employee salaries, commissions, and/or bonuses? Do free marketing tactics – like social media – count as a cost of some kind (that is, are they really free?) How much of your overhead do you allocate to sales and marketing versus other business activities?

Then you have to define what a new customer is. A new person/business who’s never purchased a product or service from you? A current customer who purchases a new or different product or service from you?

There are lots of questions and pros and cons to each answer.

We’d be happy to talk it through with you.