A common question from the power players on ABC’s Shark Tank TV program to doe-eyed entrepreneurs is, “What is your customer acquisition cost?”

That’s the wrong thing to ask, contends Steven Bellach of Bottom Line Marketing. The correct question is, “What should your customer acquisition cost be?”

Once you subtract cost of goods sold, desired profit and other SG&A expenses from your actual sale price, as a marketer you know how much budget you have to play with to acquire a customer.

Knowing this data point is a critical precursor to investing in any marketing strategy, campaign or channel.

On this show, Steven enlightens us on the importance of and methodology for establishing an accurate target CAC. He comes armed with examples that crystallize the theoretical and even brings to the party a valued client, Purusha Rivera of My Baby’s Heartbeat Bear.

Purusha and Steven shared their story of working together to better understand her company’s customers, the comparative profitability of wholesale vs. direct customers, and the transformation of strategy, channels and creative this knowledge inspired.

Customer Acquisition Economics