1. Here an overview of cost per acquisition from Pear Analytics:


You can get as detailed as you want on what “total campaign cost” means to you in terms of labor, graphic design, ad expense, printing, mailing, etc., but the most important thing is that you break it down by individual campaign. Keep in mind that your cost per acquisition may be quite high in the beginning as you front-load all of your set-up fees. Those will get diluted as the campaign starts to generate leads and sales over time.


2. Your cost of acquisition not only depends on the total campaign cost but also the life time value of the customer acquired.


3. There are two components that now need to be tracked:

  • Cost to Acquire Customers (CAC) 
  • The ability to monetize those customers, or LTV (which stands for Lifetime Value of a Customer) 


4. To compute the cost to acquire a customer, CAC, you would take your entire cost of sales and marketing over a given period, including salaries and other headcount related expenses, and divide it by the number of customers that you acquired in that period. (In pure web businesses where the headcount doesn’t need to grow as customer acquisition scales, it is also very useful to look customer acquisition costs without the headcount costs.)


5. To compute the Lifetime Value of a Customer, LTV, you would look at the Gross Margin that you would expect to make from that customer over the lifetime of your relationship. Gross Margin should take into consideration any support, installation, and servicing costs.


See more at:

Startup Killer: the Cost of Customer Acquisition


Advanced discussions about cost of acquisition:


Customer Acquisition Cost: The One Metric That Can Determine Your Company’s Fate


How to Calculate Cost of Customer Acquisition (CAC) in Ecommerce