Freelancers’ Customer Acquisition Cost: 5 Critical Expenses You Must Control

Freelancers are notoriously bad at business, I must say, and mostly oblivious about freelancers’ customer acquisition cost. And I say this because of coaching many for the past 5 years, running this blog for 3 years, and doing webinar classes for a month now has given me a lot of insight into what freelancers know and do not (yet!) know.

In a freelancer’s mind, business is the same as income. You work, and then your clients pay you. Therefore, you’re in business (unless you ended up working for scammers accidentally in which case you never see the money and all you get is a valuable freelancer life lesson).

CAC… What???

What is Customer Acquisition Cost (CAC)? Most freelancers have never heard of it. They tell me their businesses do not have any expenses anyway, so... :-D

In the freelancing context, CAC is the sum of all costs that occur before you have a contract with your client, i.e. made a sale. Depending on how you find your clients it can cover:

• Marketing and advertising expenses of all types
• Publishing and production expenses (for instance the hosting fees of your blog)
• Sales effort, e.g. time spent on interviews, discussions, and scoping the project

Now, the last one is the most interesting one: sales effort! If you think of this in terms of unit economics, it is the time you spend on getting a contract. All discussions, scoping, etc. are done before making sales takes place.

But for freelancers, unit economics make no sense because you may have to spend (a lot of) time talking to multiple people, other potential clients, before you get one client to sign a contract. That is probably the biggest cost, knowing that many spend very large portions of their time on hunting clients. 57% of the participants of... [Click to continue reading]