Cost to acquire a customer equals KAC.

How much does it cost you to make money?

Every business owner always wants a new low-cost way to get new customer.

Because the lower your cost to get a customer, the better your ratio is between what you spend and what you make.

If you spend $10 to make $1,000, it seems a hell of a lot cooler than spending $900 to make $1,000.

This is how crazy wealth gets made. Here's the problem. Most entrepreneurs have never calculated their actual cash. They report on how much ad spend it costs them to get a customer, or they think that their content leads are free, or their outbound team, they don't consider only the commissions, et cetera. Then they're surprised at the end of month when they're not making

any money. That $1,000 sale you thought cost you $200 to make really cost $500. And as small of a

difference as that may seem, in some businesses, that can be the difference between $1 million

per month and $10 million a month. It's that important. So let's talk about how to know for sure.

Unlike LTGP, KAC is a hard science.

You can and should know exactly what it costs you to get a customer each month, buy channel.

If you don't and you were looking for a sign to start tracking, here's your sign. So let's do three examples. Cost of require a customer, KAC, the cost to get a new customer. Advertising dollars, payroll to a media buyer, creative team, software, sales commissions, and salaries, etc. A. Outreach example. You use $200 per month of email software. You pay someone $3,000 a month to cold email prospects for you. Emails become appointments that turn into

eight sales per month. You pay your salesperson $100 per sale. What's KAC? Total cost for eight

sales equals $3,000 emailer, $200 software, and eight people at $100 each, which is $800 of

commissions. In total, that's $4,000. Now divide that number by the number of new customers.

KAC equals $4,000 cost divided by eight new customers equals $500 each.

B. Content marketing example. You have two people on your media team that you pay $5,000 per month each.

They help you make, edit, and distribute content across all

platforms. That content turns into inbound messages and opt-ins on your site. Those leads turn into

10 new customers. You also pay $100 commission per sale. So what's KAC? Total cost for 10 new customers

equals media payroll, so 5,000 times two, so $10,000.

You've got commissions for 10 sales at $100 bucks each, which is $1,000.

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