Client Acquisition Cost Calculator

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. 

  1. I have calculated that I spent £6,000 over the past quarter
  2. 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

Customer Lifetime Value Calculator

This is the average amount a customer spends per purchase.

This is the average number of purchases a customer makes in a given time period.

This is the average duration a customer continues to purchase from your business.

This is the average cost associated with acquiring a new customer.

Results

Customer Lifetime Value:

Customer Net Contribution:

Example:

  1. Your customers on average spend an average of £100 each time they buy from you. 
  2. Your customer buys from you on average 5 times a year
  3. Your customers stay with you on average for 3 years.
  4. 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. 
 
 
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