Customer Aqusition Cost

Discussion in 'Lawn Care Business Management' started by tdoeizreal, Jan 1, 2019.

  1. tdoeizreal

    tdoeizreal LawnSite Senior Member
    Male, from Midwest
    Messages: 505

    For guys doing apps only. What's a decent/realisitic client acquisition cost. I know that's a loaded question but trying to see if there's an industry average. Or percentage of profit generated by clients?
     
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  2. RigglePLC

    RigglePLC LawnSite Fanatic
    Messages: 15,167

    At one time we calculated a cost of about $80 to find and sign up a new customer. If the mailer response rate was one in a hundred--and it cost $20 to print and mail 100 mailers--that is 20 dollars. If we only sold half of the responding calls, this becomes $40. And the salesman's time and vehicle costs to go out, measure, and quote the price. Then his time to call the customer back that night.
    Salesman's cost was his truck cost, plus salary per week divided by the number sold per week.
    Say his cost is $500 and he sells 20--that is additional cost of $25.
    Total $65.
     
  3. tdoeizreal

    tdoeizreal LawnSite Senior Member
    Male, from Midwest
    Messages: 505

    Was this during a period where you were advertising heavily and trying to obtain several hundred new clients? And was this anytime recently? My cost is more than double that.
     
  4. kemco

    kemco LawnSite Bronze Member
    Messages: 1,630

    Well I'm not an "only app guy" but it is a separate profit center for us. I will happily spend 2x one years profit for the acquisition of one spray customer. The math works out for us. Assuming that the sale has been made by one of my sales guy and I'm paying a commission that's effectively 50% entire years gross take on the job. Or roughly aa coupl hundred bucks. Now I'm averaging less than that due to referrals and my own marketing. That may change as we grow that side but right now it's still keeping me well in the black.
     

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