--- layout: default_v3 language: default permalink: customer-acquisition-cost.html i18n_link: 3505 updated: 2023-01-11 #--- article key-values ---# collection: default_topiccluster t_keyword: Customer Acquisition Cost tags: customer acquisition cost, cost of customer acquisition, what is customer acquisition cost, average customer acquisition cost for restaurants, restaurant customer acquisition cost, CAC, restaurant CAC, CAC per industry type: pillar page_id: 3505 hreflang_id: 3505 child_id: [3521,3514,3516,3513,3540,3523,3554] date_published: 2021-04-14 date_modified: 2023-01-11 #--- javascript schema ---# javascript_schema: - script: jquery_3_2_0_min - script: bootstrap_min - script: article_infinite_scroll - script: article_mix_infinitescroll - script: article_mix - script: article_mix_faq - script: article_mix_toc #--- section schema ---# section_schema: - section: nav-main_menu - section: article_body_v2 - section: footer - section: schedule_demo_cta #--- page key-values ---# meta_tags: t_meta_title: An Overview of Customer Acquisition Cost for Restaurants t_meta_description: The customer acquisition cost is an important figure that all restaurant business professionals should understand. t_meta_abstract: The customer acquisition cost is an important figure that all restaurant business professionals should understand. i_meta_image: article_body: json-ld_article: v_date_published: 2021-04-14 v_date_modified: 2023-01-11 author: p_author_id: 204 t_author: Mary Kate Morrow p_author_url: debdutta-bhattacharjee.html i_author: 204.png t_author_description: Mary Kate Morrow is a writer, editor, and social media professional currently employed as a Digital Content Writer at Altametrics. She previously graduated with both a Bachelors degree in English Language and Literature and a Bachelors degree in Gender Studies from the University of California, Los Angeles. p_author_facebook: //www.facebook.com/HubWorksApp p_author_twitter: https://twitter.com/HubworksApp p_author_linkedin: p_author_instagram: feature_snippet: p_type: text t_title: t_description: content: heading: t_title: An Overview of Customer Acquisition Cost for Restaurants t_description: The customer acquisition cost is an important figure that all restaurant business professionals should understand. image: i_image: an-overview-of-customer-acquisition-cost-for-restaurants-1618442069-4247.png t_image_description: sales marketing cost sales customer ltv cac customer cost cac cac cac v_image_attribution: //pixabay.com/photos/restaurant-people-eating-690975/ v_image_license: Creative Commons Zero v_video: paragraphs: - t_headline: What is Customer Acquisition Cost? t_text: With over a million restaurants in the United States, acquiring new customers is more challenging than ever before. Customer acquisition cost is a metric that measures estimated cost per customer that is commonly abbreviated as CAC. Ultimately, increased or decreased total sales are attributed to either fewer customers acquired or lowered customer loyalty.

There are various techniques utilized to measure customer acquisition cost that all business professionals should be aware of. Some businesses evaluate CAC ratio by asking customers directly if they are new customers. Other businesses use loyalty programs to differentiate between new customers and returning customers.

Many businesses evaluate the lifetime value and customer acquisition cost ratio together. The lifetime value estimates the average total sales per customer throughout their lifetime and is commonly abbreviated as LTV. A LTV and CAC ratio supplies insight on everything from a sales cycle to conversion rate specifics.

Understanding the difference between customer acquisition cost and cost per customer is also important. Additionally, it is important that customer retention marketing efforts are not included in customer acquisition cost figures. However, if a customer retention marketing effort brought in new customers it would be considered. Without a customer database, it is difficult, if not impossible, to discern between a new customer and an existing customer. p_headline_type: h2 image: i_image: t_description: v_attribution: v_license: video: v_video: suhYkDQYsEc v_video_language: default t_name: Customer Acquisition Cost- How to track it and calculate it t_description: Check out Slidebean Founder's Edition- //youtube.slidebean.com/founders-edition - Join our Discord Live Q&A //youtube.slidebean.com/discord - Book office hours with Caya //youtube.slidebean.com/caya-ceo The backbone of Slidebean's growth has diligently and accurately tracking our customer acquisition costs. It's really easy to track where a customer came from when you are using digital channels. Some channels, however, are much harder to measure. In this video, we'll go over the tactics we've used to track conversions over the years, and a few hacks that might be useful for harder-to-track channels like YouTube. #startups #Slidebean 0-00 - Intro1-25 - Tracking CAC- Digital channels2-07 - Tracking CAC- Google Analytics - Goals4-21 - Tracking CAC- Google Optimize5-37 - Tracking CAC- Ask your users6-20 - Tracking CAC- Google Campaign URL Builder6-51 - CAC formula and examples---Read the article- //slidebean.com/blog/startups-tracking-cac?utm_source=youtube.com&utm_medium=content&utm_campaign=ba-content Follow Caya- //twitter.com/cayahere and //instagram.com/caya_here ----Let us improve your pitch deck- //slidebean.com/pitch-deck-design?utm_source=youtube.com&utm_medium=video&utm_campaign=video-content v_url: //youtu.be/suhYkDQYsEc i_thumbnail: //i.ytimg.com/vi/suhYkDQYsEc/default.jpg i_thumbnail_1x1: //i.ytimg.com/vi/suhYkDQYsEc/default.jpg i_thumbnail_4x3: //i.ytimg.com/vi/suhYkDQYsEc/mqdefault.jpg i_thumbnail_16x9: //i.ytimg.com/vi/suhYkDQYsEc/sddefault.jpg v_upload_date: 8-20-2020 v_length_minutes: 11 v_length_seconds: 19 v_view_count: 23449 callout_text: - t_headline: Why is Customer Acquisition Cost Important for Restaurants? t_text: Acquiring new customers is crucial for both new and existing restaurants. With the marketing spend insight that a CAC formula can supply, acquisition efforts can be improved. A CAC formula helps to make sure that CAC payback is worth marketing spend efforts. When the lifetime value is incorporated into customer acquisition cost conversations, even more insights are available.

Let's say a restaurant decides to invest in paid social media advertisements for the first time. Understanding how those marketing expenses related to customers acquired would justify marketing spend and strategy. The CAC ratio helps businesses establish a baseline to accomplish customer success optimally.

Monitoring and controlling customer acquisition costs are essential to optimizing customer success. A powerful aspect of customer acquisition costs is that they can prove marketing initiative effectiveness. As such, customer acquisition costs are commonly discussed everywhere from business model to marketing spend conversations. p_headline_type: h2 image: i_image: why-is-customer-acquisition-cost-important-for-restaurants-1618442752-1204.png t_description: //pixabay.com/photos/drinks-alcohol-cocktails-alcoholic-2578446/ v_attribution: //pixabay.com/photos/drinks-alcohol-cocktails-alcoholic-2578446/ v_license: Creative Commons Zero callout_text: - t_headline: How to Calculate Customer Acquisition Cost t_text: In order to calculate customer acquisition costs, several figures must be considered. A restaurant's total customer acquisition cost includes all funds targeted towards new customers in the marketing budget. Due to many different variables at play potentially, there is not a CAC formula that is universally utilized. Various strategies to calculate customer acquisition costs include- p_headline_type: h2 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: 1. Asking Directly t_text: Asking customers directly if they are new customers is a solid strategy. Even when restaurants are executing individual marketing activities, new customers may come from other sources. For example, a word of mouth recommendation could result in a new customer visiting a restaurant.

Directly asking customers where they heard about a business will help businesses make sure marketing spend is accurately considered. Of course, it may not be possible to ask every customer directly. Staff may forget to ask or a customer may not remember where they heard about a business. A good customer acquisition strategy milestone for asking customers directly is around 40%. p_headline_type: h3 image: i_image: 1-asking-directly-1618442753-9915.png t_description: //pixabay.com/photos/restaurant-table-setting-table-449952/ v_attribution: //pixabay.com/photos/restaurant-table-setting-table-449952/ v_license: Creative Commons Zero callout_text: - t_headline: 2. Customer Reviews t_text: Analyzing new customer reviews is a part of many customer acquisition cost calculation strategies. Undoubtedly, businesses are acknowledging this as they are increasingly incentivizing staff to encourage guests to leave reviews. Additionally, new customers that leave reviews are a form of free marketing! However, if customer reviews are utilized for customer acquisition strategies then it is essential that review pages are properly monitored. p_headline_type: h3 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: 3. Google Analytics t_text: Both conversion rate and customer acquisition rates are easier to understand through Google Analytics. Google Analytics allows businesses to see where website traffic originates. The conversion rate demonstrates how many customers made reservations online or through the phone. Restaurants can even further improve the conversion rate through split testing. p_headline_type: h3 image: i_image: 3-google-analytics-1618442753-8091.png t_description: //pixabay.com/photos/cafe-restaurant-bar-people-tables-768771/ v_attribution: //pixabay.com/photos/cafe-restaurant-bar-people-tables-768771/ v_license: Creative Commons Zero callout_text: - t_title: Fact- t_text: Google Analytics allows restaurants to better understand where new customers are coming from. - t_headline: Customer Acquisition Cost Examples t_text: Both existing and new businesses can learn a lot from customer acquisition cost examples. Customer acquisition rate for existing restaurants is most easily calculated through individual campaigns, ads, or promotions. A new restaurant will have customer acquisition costs that include all opening marketing initiatives.

Let's say an existing restaurant owner supplies a 10% discount code for new customers via social media paid ads. The paid ads cost $1,000 and the restaurant acquired 20 new customers that used the code. If restaurant sales took a hit of $40 due to the discount, the total cost would be $1,040. Dividing $1,040 by the 20 new customers would calculate customer acquisition rates. In this situation, the customer acquisition rate would be $52.

Let's say, a new restaurant looking for new customers invests in a mailing list. Then, using the mailing list, the restaurant owner sends out a 25% discount code. The mailing list could cost $400, the printed material $100, and an additional $500 spent in mailing costs. The business owner could also launch a social media page, investing $2,000 in paid ads.

After a week, the business owner sees that new customers made 600 purchases at the restaurant. Factoring in the discount, she deducts $400 in revenue. The total marketing expenses figure would be $3,400 with 600 new customers acquired. Diving the total restaurant sales by new customers acquired would calculate customer acquisition rate. In this situation, the customer acquisition rate would be $5.67 per customer. p_headline_type: h2 image: i_image: customer-acquisition-cost-examples-1618442753-8776.png t_description: //pixabay.com/photos/breakfast-food-eating-meal-morning-690128/ v_attribution: //pixabay.com/photos/breakfast-food-eating-meal-morning-690128/ v_license: Creative Commons Zero callout_text: - t_title: Note- t_text: Customer acquisition cost examples are helpful to reference for both new and existing restaurant owners. - t_headline: How to Lower Customer Acquisition Costs t_text: Lowering customer acquisition costs is a common business model objective. Thankfully, there are various strategies to reduce customer acquisition costs. Top strategies to reduce CAC include- p_headline_type: h2 image: i_image: t_description: v_attribution: v_license: video: v_video: uZzCBS3BpWA v_video_language: default t_name: Reduce Customer Acquisition Costs t_description: How can your brand reduce customer acquisition costs?In this clip from the second video in Resilience- An eLearning Series For Ecommerce Brands In 2021, Allison Hartsoe, CEO of Ambition Data, shows you different ways to reduce customer acquisition costs using the CAC-CLV ratio.Watch the rest of the clips on customer acquisition in Part 2 of our eLearning series in our playlist here- //youtube.com/playlist?list=PL5tac-01YCgoH4TiXQPb298AEGwjpOqfLOr visit //www.ambitiondata.com/resilience/ to watch the full eLearning series.Don't forget to subscribe!Follow Ambition Data on Twitter- //twitter.com/ambitiondata?lang=eFollow Ambition Data on LinkedIn- //www.linkedin.com/company/ambition-data-llc/?viewAsMember=true#CustomerAcquisition #CLV v_url: //youtu.be/uZzCBS3BpWA i_thumbnail: //i.ytimg.com/vi/uZzCBS3BpWA/default.jpg i_thumbnail_1x1: //i.ytimg.com/vi/uZzCBS3BpWA/default.jpg i_thumbnail_4x3: //i.ytimg.com/vi/uZzCBS3BpWA/mqdefault.jpg i_thumbnail_16x9: //i.ytimg.com/vi/uZzCBS3BpWA/sddefault.jpg v_upload_date: 2-26-2021 v_length_minutes: 2 v_length_seconds: 51 v_view_count: 7 callout_text: - t_headline: 1. Free Exposure t_text: What better way to reduce CAC than through free exposure? Word of mouth marketing is generally the first free exposure that comes to mind. However, restaurants that encourage word of mouth marketing must make sure to supply a good customer experience. Studies show that negative word of mouth is 300% more powerful than positive word of mouth.

A solid social media presence is universally recommended to reduce customer acquisition costs. Social media offers many free exposure opportunities for restaurant business professionals. A simple action like creating a geotag or interacting with customer posts can go a long way. Marketing expenses towards social media are still important as paid social media ads are more effective customer acquisition tools. p_headline_type: h3 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: 2. Test t_text: Acquiring customers often requires a lot of testing. Experts recommend that restaurants only test one marketing idea at once. Careful monitoring of a marketing idea over a specific time period helps inform marketing strategies to come.

For example, let's say a business decides to launch a social media lead generation and email marketing campaign simultaneously. Obviously, these marketing expenses will likely result in total sales increasing. However, pinpointing which marketing expenses resulted in new customers is difficult if not impossible. p_headline_type: h3 image: i_image: 2-test-1618442753-4051.png t_description: //pixabay.com/photos/restaurant-food-lunch-dinner-691397/ v_attribution: //pixabay.com/photos/restaurant-food-lunch-dinner-691397/ v_license: Creative Commons Zero callout_text: - t_headline: 3. Track t_text: Properly tracking customers supplies businesses with a wealth of information. Tracking customers appropriately is unlikely without great technology. A point of sale system equipped with a customer database is essential to properly track new customers and existing customers.

A point of sale system with a customer database allows businesses to track through loyalty programs or credit card transactions. 90% of customers pay for their restaurant purchase with their credit card. With a client database, businesses can use credit card information to differentiate between new customers and existing customers. A restaurant loyalty program can identify a new customer and increase lifetime value significantly. Additionally, restaurant loyalty members spend 46% more than non loyalty members! p_headline_type: h3 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: Top Customer Acquisition Strategies for Restaurants t_text: There are many different customer acquisition strategies available. The customer acquisition strategy for one business model may not be the same as another. Top customer acquisition strategies that all business professionals should be aware of include- p_headline_type: h2 image: i_image: top-customer-acquisition-strategies-for-restaurants-1618442753-8470.png t_description: //pixabay.com/photos/people-man-woman-couple-2557408/ v_attribution: //pixabay.com/photos/people-man-woman-couple-2557408/ v_license: Creative Commons Zero callout_text: - t_headline: 1. Online t_text: Customers acquired online are more prevalent than ever before. From social media to third party reservation platforms, there are virtually endless online marketing sales opportunities available. Experts advise that the bulk of customer acquisition strategy online should focus on the business website.

Time spent acquiring a strong website is time spent well. Businesses should make sure that direct reservations are a high priority. Direct reservations are bookings accomplished outside of third party systems or services. Direct reservations include new customers acquired via phone or business website.

Experts recommend that direct reservation efforts first address real time reservation widgets. Excellent reservation widgets increase lifetime value and reduce customer acquisition costs. Choosing the right reservation widget is not an easy task but there are many best practice tips available. The average customer should be able to easily access and navigate a reservation widget. Automatic customer data imports and real time table availability are additional suggested reservation widget requirements. p_headline_type: h3 image: i_image: t_description: v_attribution: v_license: callout_text: - t_headline: 2. Time Period t_text: Understanding the difference between customer acquisition time period strategies is important. Unfortunately, many sales team and content marketing professionals are too focused on short term customer acquisition efforts. Common short term customer acquisition examples include discounts and free samples. Short term customer acquisition efforts often increase the cost per customer acquired and reduce customer retention.

Long term customer acquisition is both sustainable and successful. Long term customer acquisition includes an established social media following and customer database. SEO investments and Google reservations are also commonlt utilized long term customer acquisition strategies. p_headline_type: h3 image: i_image: 2-time-period-1618442753-8441.png t_description: //pixabay.com/photos/couple-restaurant-dating-drink-1807617/ v_attribution: //pixabay.com/photos/couple-restaurant-dating-drink-1807617/ v_license: Creative Commons Zero callout_text: - t_headline: 3. Retention t_text: A customer acquisition strategy that only focuses on new customers is not likely to succeed. While acquiring a new customer may boost the conversion rate short term, retention justifies marketing spend long term. Customer retention strategies should include CRM technology and technology programs. An official loyalty program is a good customer acquisition investment choice. CRM technology increases customer success and conversion rate figures. CRM technology is customizable, allowing businesses to send emails over a certain time period and even acknowledge customer birthdays! p_headline_type: h3 image: i_image: 3-retention-1618442753-4664.png t_description: //pixabay.com/photos/coffee-brew-caffeine-coffee-making-984328/ v_attribution: //pixabay.com/photos/coffee-brew-caffeine-coffee-making-984328/ v_license: Creative Commons Zero callout_text: - t_title: Pro Tip- t_text: A good customer acquisition strategy recognizes customer lifetime value and retention rates.
- t_headline: Conclusion for Restaurant Customer Acquisition Cost t_text: p_headline_type: h2 image: i_image: t_description: v_attribution: v_license: callout_text: event_body: json-ld_event: t_name: Employee Scheduling for Restaurant Managers t_description: Attendees will learn how create excellent schedules. The class teaches managers how to estimate the number of employees they need to staff their locations; how to accurately forecast their customer demand; how to quickly and accuaratly write and communicate schedules to employees; and how to evaluate the accuracy and optimization of their schedules to make adjustments. v_start_date: 2022-08-08 i_image: p_location_name: Altametrics Online Webinar Course p_address: webinar.hubworks.com?site=altametrics v_price: 10.00 t_offer_description: Priority Registration v_registration_url: webinar.hubworks.com?site=altametrics ---