Simple formula for customer acquisition cost (CAC) #smallbusinessowner #shorts #marketing

Customer acquisition costs for local service businesses. What you want to do is take your ad spend over a specific amount of time, typically a month or a year, and then you want to divide it by the number of new customers that you brought in from that ad channel. So if you spend $1,000 on Angie and you brought in 10 new customers, your customer acquisition cost is $100 per new customer from Angie. And this will allow you to figure out over a lifetime value of a customer. Does it make sense to advertise on this platform? And what you want to do is segment over all of your campaigns. Facebook, Yelp, Google, Angie, thumbtack house, anyone that you use and then come up with your average customer acquisition cost. If you're ever thinking about selling your business or you're trying to scale your business, you know that if you can get a customer at this cost on average, then you're going to be able to grow your business. So it's just about how much more money can I spend to get these customers? If you like, comment about marketing local service businesses, be sure to hit like and subscribe. We'll see you in the next video.