Lead recovery & response
Contractor Customer Acquisition Cost Calculator
Works what a contractor customer costs, including the estimates that did not sell.
Result
CAC counts every customer won in the month against that month's spend. Where your sales cycle runs long (replacements, commercial work) compare a quarter rather than a single month.
Run the missed call calculatorHow the calculation works
Marketing spend plus the cost of estimating time, including the estimates that did not convert, divided by customers won. The estimating time is substantial in the trades, since each quote involves travel and a site visit, and at a typical close rate several are consumed per job won.
What moves the number
- Marketing spend across channels.
- Estimating time and travel per quote.
- Close rate, which sets quotes per job won.
- Referral share, which costs almost nothing.
Where this one goes wrong
Estimating is the real acquisition cost in a contracting business and it almost never appears in any budget, which means acquisition looks cheap while the owner spends their evenings writing quotes that do not convert. Cost the hours. Qualifying before travelling to quote is the lever that follows, since a caller shopping three prices on a job you cannot be competitive on has consumed a site visit for nothing.
Before you quote
- Cost estimating time and travel as acquisition spend.
- Qualify on the phone before travelling to quote.
- Measure cost per customer won, including unsold estimates.
Questions
About this calculator
What does a contractor customer cost to acquire?
Marketing plus the estimating time, including the quotes that did not convert. The estimating is substantial since each quote involves travel and a site visit, and at a typical close rate several are consumed per job won.
How can estimating cost be reduced?
By qualifying on the phone before travelling. A caller shopping three prices on a job where you cannot be competitive has consumed a site visit for nothing, and a few questions beforehand identifies most of those.
What is the cheapest source of work?
Referrals and repeat customers, by a wide margin, since both arrive pre-qualified and convert far better. Asking satisfied customers for referrals is the highest-return activity available and most contractors never do it.
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How to use this calculator
- Monthly marketing spend ($). Ads, directories, sponsorships, agency fees, print.
- Monthly sales and admin cost ($). The share of wages spent answering, quoting and chasing leads.
- Monthly software cost ($). Enter your own figure; the page starts at $450.
- New customers per month (customers). Enter your own figure; the page starts at 34 customers.
- Customer lifetime value ($). Use the lifetime value calculator if you don't know this.
- Gross margin (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to cost to acquire one customer, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Monthly marketing spend | $6,000 |
| Monthly sales and admin cost | $2,800 |
| Monthly software cost | $450 |
| New customers per month | 34 customers |
| Customer lifetime value | $2,600 |
| Gross margin | 45% |
What comes out
| Result | Value |
|---|---|
| Cost to acquire one customer main result | $272.06 |
| LTV to CAC ratio | 9.6× |
| Total monthly acquisition spend | $9,250 |
| Gross profit per customer, after CAC | $897.94 |
Each customer costs $272.06 to acquire and returns $897.94 in gross profit after that, an LTV:CAC ratio of 9.6×.
How sensitive the answer is
Holding everything else steady and changing only monthly marketing spend, this is what happens to cost to acquire one customer. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Monthly marketing spend ($) | Cost to acquire one customer |
|---|---|
| $3,000 | $183.82 |
| $4,500 | $227.94 |
| $6,000 example above | $272.06 |
| $9,000 | $360.29 |
| $12,000 | $448.53 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Monthly marketing spend ($)
- Ads, directories, sponsorships, agency fees, print.
- Monthly sales and admin cost ($)
- The share of wages spent answering, quoting and chasing leads.
- Monthly software cost ($)
- A money amount, starting at $450.
- New customers per month (customers)
- Measured in customers, starting at 34 customers.
- Customer lifetime value ($)
- Use the lifetime value calculator if you don't know this.
- Gross margin (%)
- A percentage, between 0 and 100, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Cost to acquire one customer | The headline result. A money figure. |
| LTV to CAC ratio | A number. |
| Total monthly acquisition spend | A money figure. |
| Gross profit per customer, after CAC | A money figure. |
Keep going
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