What does each new customer cost?

Cost per acquisition is total acquisition cost divided by new customers acquired. For bought calls, include actual billed call spend and the other costs of acquiring those customers. Count each new customer once, using the same group of calls and the same follow-up window.

Calculate CPA and break-even call price

Choose inputs you can reconcile

Billed calls and average charge

Use finalized charges, after any confirmed credits. Average charge is total call charges divided by billed calls. Delivered calls and ringing attempts are not the same as billed calls.

Other acquisition costs

Include allocated agent labor, after-call work and other acquisition costs you want this calculation to cover. Agent time on unbilled calls still belongs here. Count a cost once.

New customers

Count distinct acquired customers attributable to this call group. Choose what qualifies as an acquisition and how long you wait for a sale to mature. A second policy for the same person is not a second new customer.

Retained value per customer

Use your own estimate of value retained after expected cancellations, chargebacks and servicing costs over a stated period. Exclude acquisition costs already entered above. An advance commission is not necessarily the amount you ultimately keep.

The formulas, without a forecast

Total cost = billed calls × average charge + other acquisition costs
CPA = total cost ÷ new customers
Break-even call price = (customers × retained value − other costs) ÷ billed calls

In the hypothetical example above, 100 billed calls at $25 cost $2,500. Add $500 of other acquisition costs: total cost is $3,000. Ten new customers make CPA $300. If each customer retains $400 of value under your assumptions, the call-price ceiling at break-even is ($4,000 minus $500) divided by 100, or $35.

That $35 is an arithmetic ceiling for this example, not a suggested bid or a Callmart quote. A business usually needs room for uncertainty and costs omitted from the worksheet. Lower retained value, fewer customers or higher staffing costs reduce the ceiling.

Zero sales and delayed outcomes

With zero acquired customers, CPA is undefined, not zero. Keep the spend visible. If other acquisition costs exceed retained customer value, no nonnegative call price breaks even in this model, even free calls.

Separate the date calls arrived from the date sales closed. For example, review calls received in March and the customers they produced through April 30. Compare that group with another group given an equally long follow-up window. Comparing mature calls against yesterday's calls creates a misleading trend.

Use the result to investigate

Calculate separately for each campaign and meaningful operating setup. A blended number can hide a costly campaign. Review answer rate, caller fit, billed share and retained sales alongside CPA before deciding what changed. A buffer can change the billed share without saving agent time or improving customer fit.

Common questions