Calculating the Cost of Acquiring New Clients

First published in
Thriving Women In Business
By Debbie Mrazek

Calculating costs of a new client, marketing, salesAs a business owner you understand the importance of maintaining and expanding your client base. If you have been in business for a long time, you may not understand the true costs associated with acquiring new clients while keeping your existing ones. To help you understand the costs associated with attracting new clients, I have listed some helpful information to help you understand everything involved.

Many business owners do not accurately calculate the costs associated with acquiring new clients, also referred to as cost per acquisition. To properly calculate your cost per acquisition you need to begin by making a list of every marketing campaign you have ran over a specific period of time. To obtain the most relevant data you should measure over a 12-month period. But many sales professionals believe that you can still calculate a relevant bit of data by going back six months.

Once you have listed all of the marketing campaigns you have used, it is now time to list the cost of each of the campaigns you ran during the time frame you are using. These fees should include any copywriting fees, media listing fees and design fees. You should also take into consideration the cost of you and your employees time spent on each of these campaigns as well as all of the other costs used during this time. These additional costs include utilities, rent, internet and cell phone charges to list a few.

After you have calculated all of these costs and added them up, you have successfully calculated the cost for one ad. Next, you will have to determine how many sales were generated by that particular ad. This may be one of the hardest parts of calculating the cost of acquiring a new client. To help you effectively measure how many clients a particular ad brings in, you may want to create a specific phone number or website to use only in that ad.

It is much easier to measure the effectiveness of online marketing campaigns because you can utilize all of the tools available on your website to monitor traffic. In many cases these numbers can be automatically tracked and produced in a report that is often emailed to you. However, you still need to take into consideration any costs associated with running an online campaign.

Calculating the cost of acquiring new clients can be somewhat tedious and confusing. But it is an effective way to see where you marketing campaigns are working and where they aren’t. If you are trying to determine the most effective marketing technique, this is a great way to do so.