forbes.com – Getting a new customer isn’t easy, but it can be done. Before you break out the bubbly to celebrate, however, you’ll want to know how much money you spent to actually get that new customer. Talk about a complicated undertaking! As an accountant and former CFO, I’ve gone through this exercise with clients and former employers, but tackling it in my own company has been a real eye-opener.
What every business needs to know is that understanding your costs has more to do with aligning your margins than it does with profit. In our company, understanding what it costs to bring a customer in the door ensures we can truly calculate the cost of a project. If we just calculate profits using the cost of the product or service, we’ll have a gap in our metrics. After all, we don’t want to spend more money bringing in a customer than we actually make on the sale.
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