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Furlan Systems

Acquisition Economics

How to Calculate Customer Acquisition Cost for a Service Business

Furlan Systems6 min read

Quick Answer

Add all acquisition costs for a period — media spend, sales labor, tools and any acquisition fees — then divide by the number of customers who actually paid in that period. Compare the result to gross profit per customer to determine whether the acquisition is profitable.

Step one: define the period and the cohort

For fast-closing categories a calendar month works. For long-cycle work like remodeling or concrete, a monthly view will misstate everything, because the customers who paid this month came from spend two or three months ago. Use cohorts tied to when the opportunity was created.

Step two: total the real costs

Include media spend, creative production, landing page and tooling costs, the labor cost of whoever answers and sells, and any commissions or acquisition fees. Excluding sales labor is the most common error.

Step three: count paying customers, not leads

Count only customers who were sold and whose invoice was collected. A booked job that cancelled is not an acquired customer.

Step four: compare to gross profit

Divide gross profit per customer by CAC. If the ratio is comfortably above one and capacity exists, the constraint is usually spend, not strategy. If it is below one, the offer, the close rate or the pricing needs work before more budget is added.

How Furlan Systems applies this

We fund and operate this work directly: capital, advertising, technology, follow-up, sales and closing. Operating partners provide capacity, operations, fulfillment and customer experience.

Want this operated for your market?

Apply for a territory review. If the fit is right, we fund and run acquisition while you fulfill the work.

For qualified service businesses and territories. Partnership structure varies.