# How to Calculate Customer Acquisition Cost

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There are two ways to increase profits: through increased sales or lowered costs. One significant cost is the cost to acquire customers. Financial analysts refer to this as marketing. There are as many different ways to market to customers as there are customers. The challenge is determining the cost of acquiring each customer. While there's no way of knowing the exact cost of each customer, there's a way to calculate the average cost of acquisition.

Identify the number of new customers per month. This is the number of new customers that have purchased goods or services, requested a catalog, visited the company website, called in to make an appointment or get more information, or any other documented activity which increases your customer base.

Calculate the start-up costs associated with the website and mailing catalogs, and the operating costs associated with the customer service or call center. Include in this the cost of operating any department, physical or virtual, that the customer can go to get more information about your product or service.

Calculate the cost of maintaining marketing literature and materials including website costs, catalogs, announcements, fliers, and any other charge related to publications or online marketing.

Calculate the average monthly cost of promotions. This includes online and offline promotions that are one time or continuous.

Add all the monthly costs and divide by the number of new customers per month. For instance, if you have an average of 230 new customers a month, maintenance costs of \$2,000 per month, start-up costs which average to \$100 per month over a one-year period, and average promotions costing \$200 per month, the cost of acquiring one customer is \$2,000 plus, \$100, plus \$200 or \$2,300. \$2,300 divided by 230 is \$10 per customer.