STEP 19Estimate the Cost of Customer Acquisition (COCA)
WHAT IS STEP 19, ESTIMATE THE COST OF CUSTOMER ACQUISITION (COCA)?
Estimate the total marketing and sales expense in a given period to get new customers and divide that total expense by the number of new customers. This will be the marketing and sales expense required to acquire one additional average customer for the given time period.
WHY DO WE DO THIS STEP, AND WHY DO WE DO IT NOW?
The unit economics are a simple but effective indicator for how sustainable and attractive your business will be at any point in time and, maybe most important, as it scales. You just completed a meaningful go-to-market plan in Step 18, and that is the critical input to estimate your COCA.
COCA is a tough number to estimate, so entrepreneurs often just bypass this step--but that is a big mistake, as your business will be flying blind if you skip the COCA estimation. Entrepreneurs also, almost without fail, underestimate COCA.
PROCESS GUIDE
You have done an enormous amount of work in this workbook so far, and now you can tie it all together to see if the unit economics work. Very often they don’t initially, but ...
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