Not counting word of mouth and what-not, what's the average you spend to acquire a new customer? What’s the most you would spend?

I personally spend in advertising dollars about $30 to gain a customer that on average pays $8 per month. In about 4 months I make the money back from the customer acquisition. However, I’m different from most hosts here, and once my customers are settled they require virtually no support. I also am very stingy with bandwidth and disk space. My $10 plan comes with 300 MB of space and 3 GB of bandwidth. The high prices are allowing me to move to Internap and to be able to sleep at night.

Anyway, does your business have a model like this?

How did you calculate your cost to aquire a customer?

Spent x amount on advertising, got x amount of customers, and factored in a rough amount of customers that came from word of mouth.

Originally posted by Leif
Spent x amount on advertising, got x amount of customers, and factored in a rough amount of customers that came from word of mouth.
How were you tracking the customers that came in due to advertising? I've thought about using a code so that I would know which source/advertising led them to me.

Greetings Leif:

"I personally spend in advertising dollars about $30 to gain a customer that on average pays $8 per month. In about 4 months I make the money back from the customer acquisition. "

So the $8 per month your customer pays is pure profit?

If the $8 is gross revenue, then the payback period is calculated incorrectly <smile>.

$30 / ($8 per month gross revenue - $direct cost per month - $operational costs) = payback period.

Thank you.

Yes, I realize that, but at the moment it is basically pure profit, minus credit card fees and aqnd the $19/month I'm spending on a reseller account. That's all going to change though as I just ordered some servers to put up at Internap, but being that my customers use virtually no bandwidth, the hefty Internap fees won't be bad. However, not counting hardware costs, it will probably take me 5-6 months now to recover the money, and 9-10 months counting hardware costs. I haven't figured all the numbers out in my head yet, but I will shortly. Regardless, if I have to take a hit at the beginning, I will, as I can afford it. Whatever it takes to get to that 1000 customer mark is what I'll do. Anyway, instead of interogating me, how about some other people post their numbers?