This metric takes into account all of the costs associated with attracting, engaging, and converting a prospect into a paying customer, including marketing, sales, and operational expenses.
To calculate client COA, a company would typically add up all of the costs associated with acquiring a new client, including:
- Marketing costs: This includes expenses related to advertising, content creation, and promotional campaigns aimed at attracting new customers.
- Sales costs: This includes expenses related to sales staff salaries, commissions, and bonuses, as well as any costs associated with sales tools, such as software or hardware.
- Operational costs: This includes expenses related to fulfilling orders, providing customer service, and any other operational expenses associated with acquiring new customers.
Once all of these costs are added together, the total is divided by the number of new customers acquired during a specific period, such as a month or a year, to determine the client COA.
The client COA is an important metric for businesses to track, as it helps them understand the cost-effectiveness of their marketing and sales efforts, and to identify areas where they may need to optimize their strategies to reduce costs and improve profitability.