Last episode, I talked about factors that play into calculating customer acquisition cost for your business. This week, I'll explore how you can figure out what an appropriate acquisition cost is for your shop. As usual, it's not a one-size-fits-all answer, but I’ll talk about a few factors that can help you decide:

• Advertising Spend as a Percentage of Sales: Many successful businesses allocate around 6% of their sales for advertising purposes, but does this apply to all shops?

• How much free demand does your shop have? From physical visibility to word-of-mouth, what kind of factors to consider when determining how much advertising you need to do.

• Understanding how customer retention and loyalty relate to customer acquisition cost, especially from the perspective of Average Repair Order (ARO)

Thanks to our partners, NAPA TRACS and Promotive

Visit NAPATRACS.com and GoPromotive.com

Paar Melis and Associates – Accountants Specializing in Automotive Repair

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