Customer acquisition cost is total spend on winning customers, divided by the number won.
The difference from cost per lead
Cost per lead counts enquiries. This counts customers.
The bridge between them is close rate: a channel producing cheap leads that rarely close has a high acquisition cost, and the lead figure alone hides that.
What belongs in the calculation
Advertising, referral fees, marketing tools, and the time spent estimating work that was not won.
That last one is routinely omitted and is frequently the largest component in a trade business, because estimating is skilled time — see estimating.
What it has to be compared against
Customer lifetime value. A cost of two hundred is excellent for a customer worth thousands over years and ruinous for a one-off small job.
The comparison is against lifetime margin, not lifetime revenue.
Payback matters as much as the ratio
A healthy ratio earned back over three years still consumes cash now — see payback period. Small businesses are usually constrained by when the money comes back rather than by whether it does.
Why referrals change the picture
Referrals cost almost nothing to acquire and close at a higher rate, so a business with a strong referral flow has a far lower blended acquisition cost than its advertising suggests.
Which is why measuring channels separately matters — a single blended figure can look healthy while every paid channel loses money.
Net promoter score
A survey measure of how likely customers are to recommend the business. Directionally useful over time; less so as an absolute. For most small trades the more reliable signal is the actual rate of referrals and reviews.