CAC for Tradesmen: Customer Acquisition Cost

Full definition

Customer Acquisition Cost (CAC) is the total amount a business spends on marketing and sales activities divided by the number of new customers won during the same period.

CAC = Total marketing and sales spend / Number of new customers acquired

For a sole-trader plumber spending £400 per month on Google Ads and a Checkatrade subscription, who acquires eight new clients in that month, the CAC is £50. For a small construction firm running paid social, a website, and an SEO retainer totalling £2,000 per month whilst winning ten new projects, the CAC is £200.

Industry benchmarks from First Page Sage (2021-2025, 103 B2C clients) show average CAC figures by channel:

Trade sub-sector	Organic CAC (SEO/content)	Paid CAC (PPC/paid social)
Home services	£72	£93
Electrical contractors	£78	£97
Construction firms	£161	£235
HVAC and heating	£66	£78

Note: original figures are in USD; converted at approximately 0.80 GBP/USD for indicative comparison.

Why it matters in 2026

Margins in the trades sector are structurally compressed: material costs rose 6-8% year-on-year through 2024-2025 (BCIS), and skilled labour is scarce following the CITB's forecast of a 239,300-worker shortfall by 2029. When the top line cannot easily expand, profit improvement comes from reducing the cost of winning each job.

A tradesman who does not track CAC has no reliable way to know whether their Checkatrade subscription, their Google Ads budget, or their word-of-mouth referral programme is actually producing customers efficiently. Tracking CAC by channel makes it possible to reallocate spend from high-cost sources to low-cost ones without reducing overall volume.

Organic digital channels — Google Business Profile optimisation, local SEO, and review management — consistently produce lower CAC than paid advertising in this sector, because the marginal cost of an additional enquiry from a well-ranked profile is near zero once the initial setup is complete.

How it is calculated

1. Define the measurement period — typically one calendar month or one quarter.
2. Sum all marketing and sales spend in that period: paid ads, directory subscriptions, website costs, lead-generation platforms, any commission paid to referral partners.
3. Count new customers only — not repeat bookings or warranty calls. A new customer is a paying client who had no prior relationship with the business.
4. Divide total spend by new customer count.

The most common error is omitting the cost of time spent on marketing activities. A tradesman who spends six hours per week on social media at a billable rate of £45 per hour is spending £270 per month on content creation — this should be included in the numerator.

Difference from Cost per Lead (CPL)

Dimension	CAC	Cost per Lead (CPL)
What is measured	Each paying customer won	Each enquiry received
Includes unconverted leads	Yes — folded into total spend	No — counts all leads regardless of outcome
More useful for	Profitability and ROI analysis	Diagnosing channel efficiency and volume
Typical UK trades range	£66-£235	£15-£90
Affected by close rate	Yes, strongly	No

CPL tells you how much it costs to get a phone call or a form submission. CAC tells you how much it costs to close a job. The gap between the two reveals conversion rate problems: a low CPL with a high CAC signals that leads are plentiful but the sales process — quoting, follow-up, responsiveness — is leaking revenue.

Related terms

Missed Call Rate, Google Business Profile, Local Pack.