Client Aquisition Cost Calculator
Example:
Determine the period of time you are going to calculate i.e. monthly, quarterly, yearly.
In this example, I am going to use quarterly because it gives me longer to allow for customer conversions.
- I have calculated that I spent £6,000 over the past quarter
- I brought on 110 new customers in the same period.
The result is each new customer cost me £54.55.
Life Time Value per New Client
Now that you have calculated the cost of acquisition per new client what you really need to know to ensure these are profitable clients is:
- how much revenue a new client brings to your business over the entire time they are purchasing from you.
- how much will you have “left over” after the cost of acquisition of your new client that will contribute to the running of the business and profit.
Customer Lifetime Value Calculator
Results
Customer Lifetime Value:
Customer Net Contribution:
Example:
- Your customers on average spend an average of £100 each time they buy from you.
- Your customer buys from you on average 5 times a year
- Your customers stay with you on average for 3 years.
- Use the Customer Acquistion Cost that you calculated from the Calculator above, but lets say, it is £54.55
After plugging in these numbers your:
- Customer Life Time Value is: 1,500
- The Net Contribution of one customer is: 1,445.45
These numbers indicate that the cost of acquisition for a new customer is very profitable.