Disciplined Entrepreneurship: 24 Steps to a Successful Startup

STEP 19

Calculate the Cost of Customer Acquisition (COCA)

IN THIS STEP, YOU WILL:

• Determine how much it costs to acquire a customer over the short term, medium term, and long term, based on your sales process.

We love the entrepreneurs and their optimism but it almost always blinds them to the real costs of customer acquisition. It is essential that you do realistic calculations and then make appropriate adjustments over time.

Caution: The Cost of Customer Acquisition (COCA) is an extremely important metric and can be difficult at first to understand and calculate. This step explains the COCA in detail, but you will need to pay close attention to the details to calculate it correctly. It requires a significant amount of effort and systematic thought. Do not skip or skim this step because getting COCA right is both critical and challenging.

The sales process you defined in the previous step (Step 18) directly influences your Cost of Customer Acquisition (COCA). In determining the ...