How to Calculate Your Cost per Enquiry and Cost per Customer

Spending R3,000 on marketing tells you how much you spent. It does not tell you whether that money produced useful enquiries or customers. These simple calculations help connect the two.

You spend money on Google Ads.

Someone else manages your Facebook page.

You pay for a website.

You have a directory listing.

Customers also arrive through referrals.

At the end of the month you know what several of those activities cost.

But can you answer:

How much did each genuine enquiry cost us?

Or:

How much did it cost us to acquire each new customer?

Those numbers can help you compare marketing channels much more meaningfully than views, followers or clicks alone.

You do not need advanced financial software to calculate them.

You need:

And a consistent way of deciding what belongs in each number.

Use these two basic formulas:

Cost per enquiry

Marketing cost ÷ genuine enquiries = cost per enquiry

If you spend R4,800 on a marketing channel and receive 24 genuine enquiries:

R4,800 ÷ 24 = R200 per enquiry

Cost per customer

Marketing cost ÷ new customers acquired = cost per customer

If those R4,800 in marketing costs eventually produce 6 new customers:

R4,800 ÷ 6 = R800 per customer

Those numbers are not automatically good or bad.

The next question is whether the customers are profitable enough to justify what it cost to acquire them.

Cost per enquiry tells you how much marketing expenditure was required, on average, to generate one genuine customer enquiry.

The basic formula is:

The important word is:

genuine.

Do not count:

You are trying to measure people who genuinely contacted the business about potentially buying what you offer.

Imagine a Johannesburg cleaning company spends:

R3,600 on a Google Ads campaign

During the measurement period, the business receives:

18 genuine cleaning enquiries attributed to the campaign

The calculation is:

R3,600 ÷ 18 = R200

So the:

Cost per enquiry = R200

That tells you something useful.

But not enough.

You still don't know whether those 18 enquiries were suitable.

This is where marketing analysis becomes more useful.

Suppose those 18 enquiries include:

6 outside your service area

3 asking for services you don't offer

That leaves:

9 suitable enquiries

Your cost per suitable enquiry is:

R3,600 ÷ 9 = R400

That is a very different number.

The original dashboard might make the campaign look like:

R200 per enquiry

But from an operational perspective, the business is actually paying:

R400 for each relevant opportunity

This is why tracking enquiry quality matters, not only total enquiry volume.

A useful small-business marketing report can separate:

This creates a clearer journey:

You can calculate a cost at each stage.

Use:

Channel marketing cost ÷ genuine enquiries

Example:

Spend: R6,000

Enquiries: 30

R6,000 ÷ 30 = R200

Cost per enquiry: R200

Use:

Channel marketing cost ÷ suitable enquiries

Example:

Spend: R6,000

Suitable enquiries: 15

R6,000 ÷ 15 = R400

Cost per suitable enquiry: R400

Use:

Marketing cost ÷ new customers acquired

Example:

Spend: R6,000

New customers: 5

R6,000 ÷ 5 = R1,200

Cost per customer: R1,200

Now the channel looks like this:

All figures above are illustrative examples only. They are not ListMyBuzz benchmarks or recommended marketing costs.

At its simplest, it answers:

How much did we spend to gain each new customer?

This number is often referred to as customer acquisition cost, or CAC.

However, there is an important distinction.

For practical marketing comparison, you might calculate:

Google Ads spend ÷ customers attributed to Google Ads

This lets you compare channels.

A more complete business-wide CAC may include more than advertising. It could include relevant:

The more costs you include, the more complete the figure becomes.

The key is consistency.

Do not calculate Facebook using only advertising spend and compare it with Google using advertising, agency fees and staff wages. You would be comparing two different definitions.

A practical approach is to calculate two versions.

This gives a broader picture of what customer acquisition actually costs your business. Label the figures clearly so you know what you are comparing.

Imagine your Meta advertising shows:

Ad spend: R5,000

New customers: 10

If you calculate only platform spend:

R5,000 ÷ 10 = R500 per customer

But suppose you also paid:

R2,000 campaign management

R1,000 for creative work

Your total acquisition cost becomes:

R8,000

Now:

R8,000 ÷ 10 = R800 per customer

Both calculations are technically useful. They simply answer different questions.

R500 tells you the media-spend cost.

R800 gives you a broader channel cost.

You may say:

"Facebook is free because I don't run ads."

But suppose you spend six hours each week creating posts, answering comments and making videos.

Your cash advertising spend may be R0.

Your time cost is not necessarily R0.

The same applies to:

You do not have to turn every hour into a perfect rand value. But when comparing channels, at least record:

Time required: Low / Medium / High

That helps prevent a channel that consumes 20 hours a month from appearing completely free.

Word-of-mouth marketing may have no direct advertising bill. But the business still invests in:

The cost may be low compared with advertising, which can make referrals extremely valuable. But do not force an artificial R0 cost into your analysis if significant resources are involved.

Suppose you spent:

R2,500

and received:

0 genuine enquiries

Do not write:

Cost per enquiry = R0

That would be incorrect.

You cannot divide R2,500 by zero.

Record:

Spend: R2,500

Enquiries: 0

Cost per enquiry: Not calculable because no enquiries were generated

That result itself is important. Investigate what happened.

Imagine:

Channel A

Cost per enquiry:

R80

But most enquiries are unsuitable.

Channel B

Cost per enquiry:

R300

But most enquiries fit your business and several become customers.

Channel A is cheaper. That does not automatically make it better.

Compare the journey all the way through. For example:

These are fictional figures designed only to illustrate the calculation.

Looking only at cost per enquiry would make Channel A look excellent.

Looking at customer outcomes tells a different story.

Even cost per customer doesn't tell you everything.

Suppose:

Channel A costs R600 per customer

Channel B costs R1,000 per customer

At first glance, Channel A seems better.

But what if customers from Channel A typically buy:

R700 once

while customers from Channel B typically become:

R8,000 projects

The higher acquisition cost may be completely reasonable.

You need to compare acquisition cost with customer economics.

This is an important distinction.

Suppose it costs:

R800 to acquire a customer

The customer buys work worth:

R2,000

You might think:

"Great, we made R1,200."

Not necessarily.

You may still have:

The more useful comparison is often:

Customer acquisition cost vs gross profit contribution

not simply:

Customer acquisition cost vs revenue

Imagine two businesses each pay:

R500 to acquire a new customer

This is why there is no universal statement such as: "R500 per customer is expensive." The answer depends on your margins and customer value.

ListMyBuzz provides a free Profit Margin Calculator designed to help South African business owners calculate profit, margin, markup and break-even figures.

Before deciding whether your customer acquisition cost is acceptable, understand:

Then ask:

How much of that gross profit can we realistically afford to spend acquiring the customer?

There is no universal percentage. The answer depends on:

Do not copy another company's acceptable CAC just because you saw it online.

This can significantly change your analysis.

Suppose the first job generates:

R1,000 gross profit

and acquiring the customer cost:

R700

That may look tight.

But what if that customer returns four times over the next two years without another large acquisition expense? Their total value becomes more attractive.

This is why established businesses sometimes consider customer lifetime value, often abbreviated to CLV or LTV.

Do not assume:

"Every customer will stay with us for five years."

Use actual historical behaviour where possible. For example:

Average customer purchases: 2.3 times

may be useful if based on real records.

A fictional lifetime value number can justify almost any marketing spend. Use evidence.

For a new business with little history, focus first on the first purchase and build better customer-value estimates over time.

Your cost-per-customer calculation should usually focus on new customers acquired.

If a previous customer returns because they already know your business, they are not necessarily a new acquisition.

For example:

Marketing spend: R6,000

Customers during period: 12

But:

5 are returning customers

Only:

7 are new

If your goal is measuring acquisition:

R6,000 ÷ 7 = R857.14 per new customer

not:

R6,000 ÷ 12 = R500

Otherwise your acquisition cost can look artificially low.

An important distinction:

Where the customer discovered you

is not always:

How the customer eventually contacted you

Someone may:

See you on Facebook.

Search your business on Google.

Visit your website.

Then phone.

Which channel gets credit?

There is no perfect answer for every small business. The important thing is to use a consistent attribution method.

Choose a method and label it clearly. Do not change the rule every month to make one channel look better.

This is another common calculation mistake.

Suppose you spend:

R10,000 in September

but many customers who responded to those campaigns only make decisions in October.

If you calculate:

September spend ÷ September customers

you may understate performance.

Businesses with longer decision cycles may need:

60-day

or:

90-day

measurement windows.

A kitchen-renovation company may need a different measurement period from a barber. Use a timeframe that reflects how customers actually decide.

Seasonality can affect results. For example:

may have stronger or weaker periods during the year. If your cost per customer increases during a quiet month, that does not automatically mean the channel is broken. Compare several periods when possible.

So far we have looked at individual channels. You can also calculate your overall or blended acquisition cost.

Use:

Total acquisition spending ÷ total new customers acquired

Example:

Monthly marketing costs

Google: R4,000

Meta: R2,500

Directory and listing costs allocated for the period: R500

Marketing support: R2,000

Total acquisition cost: R9,000

New customers attributed during the appropriate period:

15

R9,000 ÷ 15 = R600

Your blended cost per new customer is:

R600

This gives you a useful overall benchmark for your own business.

Both numbers have value.

Channel cost helps answer:

Which channel appears more efficient?

Blended cost helps answer:

What does customer acquisition cost us overall?

Do not confuse the two.

You can track this in a spreadsheet:

Then add:

only if those figures genuinely help your decisions.

The ListMyBuzz Expense Tracker can also help businesses record expenses and review basic profit information, which makes it relevant when marketing costs are being tracked alongside other business spending.

Imagine a small Gauteng home-services company reviewing its own numbers. All figures below are fictional.

If the owner looked only at enquiry cost:

Referrals look best.

Social looks second.

Google looks most expensive.

But cost per customer tells a different story:

Referrals remain strongest.

Google becomes considerably more attractive than social advertising.

The correct business decision could be:

not simply: "Spend everything on the source with the cheapest enquiry."

A high cost per customer can have several causes.

The marketing channel may not be the only problem.

Suppose marketing spend remains:

R5,000

but you improve your landing page and enquiry process.

Before:

10 enquiries

Cost per enquiry:

R500

After:

20 genuine enquiries

Cost per enquiry:

R250

You didn't reduce the advertising budget. You improved what happened after people encountered the campaign.

This is why websites, landing pages and customer response processes matter.

Imagine:

R5,000 marketing spend

20 suitable enquiries

But only:

2 customers

Cost per customer:

R2,500

Now suppose the business improves response time and quotation follow-up, and 5 of those enquiries become customers.

The same R5,000 now produces:

R1,000 per customer

Again, the improvement did not come from cheaper advertising. It came from what happened after the enquiry.

ListMyBuzz Growth Tools are positioned around CRM workflows, lead follow-up, reminders, booking and customer communication for businesses that need more structure after enquiries arrive.

These are completely different measurements.

Suppose your advertising platform reports:

Cost per click: R8

That does not mean:

Cost per enquiry: R8

If 100 people click:

100 × R8 = R800

but only 4 people enquire:

R800 ÷ 4 = R200 per enquiry

And if only one becomes a customer:

R800 ÷ 1 = R800 per customer

Each metric describes a different stage.

Marketing platforms may label a form completion as:

Lead

That does not guarantee the person:

Your internal records should connect marketing leads to actual customer outcomes.

There is no universal number.

Anyone telling every South African business that:

"R50 per enquiry is good"

or:

"R500 per enquiry is bad"

is ignoring the economics of different businesses.

A relevant enquiry for:

cannot all be evaluated using the same acceptable acquisition cost. Your acceptable cost depends on your own:

Again, there is no universal answer.

Ask:

A customer may be profitable over time while still creating short-term cash-flow pressure.

Know your own numbers.

For each channel, answer four questions:

If you can answer those four questions, you already understand your marketing economics better than you would from traffic statistics alone.

A spreadsheet may be enough initially.

Things become harder when you have:

At that point, source tracking and customer outcomes may need to be connected more systematically.

Where DMA101 can assist

Businesses that need broader marketing measurement and implementation support can use DMA101 as the supporting digital-growth partner. This may become relevant when the business needs to connect advertising, website forms, tracking, CRM records, marketing attribution and customer follow-up into a more coherent digital system.

ListMyBuzz remains the primary directory, discovery and business-growth platform. DMA101 should remain the supporting implementation partner, which follows the approved ListMyBuzz editorial and brand structure.

Before trusting the number, check:

Knowing that you spent R5,000 on marketing is not enough. You need to know what happened afterwards.

Start with:

Cost per enquiry = marketing cost ÷ enquiries

Then go deeper:

Cost per suitable enquiry = marketing cost ÷ suitable enquiries

And finally:

Cost per customer = acquisition cost ÷ new customers

But don't stop at the cheapest number.

Compare the cost with:

The goal is not to make every enquiry as cheap as possible. The goal is to acquire the right customers at a cost your business can sustainably afford.