How do I work out my plumbing customer acquisition cost?

For plumbing owners who want one honest number for what a new customer costs, by channel, from their own books and field software.

Get a free visibility audit · Book a growth call

How do I work out what each new plumbing customer costs me in marketing?

Add up everything you spent to win new customers in a month, including ad spend, Local Services Ads charges after credits, agency and software fees, and any wages paid for marketing work, then divide it by the number of first-time customers who paid you for a job in that same month. Work it out for each channel as well as overall, and count only new customers, not calls, leads or repeat customers. Then compare the result with what a new customer’s first job brings in, because a low cost per lead can still hide a cost per customer that loses money.

Knowing what a new customer costs is the number that tells you which marketing to keep, which is why we judge our own work by cost per booked job rather than clicks. Every plumbing marketing package includes call tracking, source tagging and a monthly report with a cost-per-lead breakdown, and ad spend is paid directly to Google or Meta, so both lines show up separately in your math. Our packages page lists what each tier costs, and the rest of the plumbing marketing questions library goes question by question.

What does customer acquisition cost mean for a plumbing company?

It’s what you spend in marketing, on average, to win one new paying customer. Owners usually call it cost per new customer or cost per job, and it sits at the end of a chain of numbers that all sound alike:

• Cost per lead: what each call, form or message cost.
• Cost per booked job: what each lead that made it onto the schedule cost.
• Cost per ran job: what each booked job that actually happened cost. ServiceTitan’s marketing reports track this one, along with a run rate, the share of booked jobs that weren’t cancelled or left unfulfilled (Use Marketing Pro Ads Analytics).
• Cost per new customer: what each first-time customer who paid you cost.

Each step down the chain costs more per unit, because some leads never book, some booked jobs never run, and some customers were already yours. The last number is the one that tells you whether your marketing is buying new business at a price you can afford.

Step 1: What period and which channels should I use?

Use a calendar month, and make one line for each channel you pay for or track: Google Ads, Local Services Ads, your Google Business Profile, your website, direct mail, a lead platform, referrals, and anything else that brings in work.

A month is short enough to act on and long enough to have a few customers in each line. For channels that bring in only a handful of new customers a month, look at the last three months together as well, so one good or bad week doesn’t swing the number. That’s our judgement, not a rule.

Keep the period the same on both sides of the math: the money spent in the month, and the new customers who first paid you in that month. If a big job sells weeks after the first call, note it; the tracking which marketing books jobs page covers tying a sale back to the call that started it.

Step 2: Which costs go into the number?

Everything you spent to bring in customers, and nothing you spent doing the work. In our judgement, put in:

• Ad spend on Google Ads, Meta and any other platform, from the platform’s billing, not from a report.
• Local Services Ads charges, minus any lead credits (Step 6 covers why).
• Agency or freelancer fees for running ads, SEO, your Google profile or your website.
• Software and tools used for marketing: call tracking, review requests, website hosting, a share of your field software if you use its marketing features.
• Lead-platform fees and per-lead charges.
• Print and mail: postcards, door hangers, sponsorships.
• Wages for marketing work, such as an office person who spends part of the week on reviews and social posts. Count the share of their time, not the whole salary.

Leave out what it costs to run the job itself: the plumber’s labor, parts and truck. Those belong in your job costing. One-time costs, like a truck wrap or a new website, can be spread over the months you expect them to keep working, as long as you’re consistent.

Step 3: How do I count new customers, not just calls?

This is the step most owners get wrong, because the easy number to grab is calls or leads. A call isn’t a customer, and a repeat customer isn’t a new one.

• Repeat callers inflate call counts. CallRail notes that a unique caller isn’t necessarily a new caller, because repeat callers make up the data in its Unique Callers report (Unique Callers report).
• Repeat customers belong in their own line. ServiceTitan recommends setting up marketing campaigns for all your incoming business, including referrals and even repeat customers (Add marketing campaigns in ServiceTitan), which keeps them out of your new-customer count.
• The lead source has to be on the customer record. Housecall Pro’s lead source field can be set on customers, jobs and estimates (How to Use Lead Sources). If the office doesn’t fill it in, the source of a new customer is a guess.

The count you want: customers who paid you for a job this month and had never paid you before, each with a lead source attached.

Step 4: How do I do the division?

For each channel, divide that channel’s costs by its new customers. Then divide total marketing costs by total new customers for the blended number.

Cost per new customer = marketing costs for the month ÷ new paying customers that month

Do both, because they answer different questions. The blended number tells you what growth is costing the business overall. The per-channel numbers tell you where to move money. A blended number can look healthy while one channel is losing money on every customer it brings in, as the worked example below shows.

Channels with no spend, like referrals or a well-run Google profile, still go in the table with their new customers. They bring the blended cost down, and they’re the reason it would be a mistake to judge the whole marketing budget by its most expensive channel.

Step 5: What should I compare my cost per new customer with?

With what that new customer is worth. Start with the first job, because it’s the number every field system can give you. Jobber’s Lead Source Report shows the invoice value from the first invoice linked to a lead, on the reasoning that it’s the first payment from a lead source that counts (Lead Source Report).

ServiceTitan’s marketing reports offer two ways to express the comparison:

• Expense to income ratio: marketing cost divided by marketing revenue. Lower is better.
• ROI: marketing revenue divided by marketing cost. Higher is better.

In our judgement, compare against gross profit, not just revenue, once you know your numbers: a new customer who pays $380 for a job with parts and labor in it hasn’t left you $380 to spend on marketing. And remember the first job is the floor of what a plumbing customer is worth, not the ceiling, if they call you again. How much you can afford to pay for a lead turns this into a ceiling for lead costs.

Step 6: How do Local Services Ads credits change the math?

Subtract them, but in the month they land. Google’s page on automated Local Services Ads lead credits says charged leads are reassessed over time and may be credited if they’re later found to be low quality, that credits are applied to your account balance within 30 days in most cases, and that the original lead charge still appears on your invoice.

So the invoice alone overstates what LSAs cost you. Pull the charged and credited leads from your lead reports, and use charges minus credits as the LSA cost. Be consistent about timing: either count a credit in the month it was applied, or go back and adjust the month the lead came in, and stick with that choice. Whether LSAs are worth it for plumbers covers the rest of how they’re charged.

Can I use Google Ads' cost per conversion instead?

Not as your customer acquisition cost. Google’s help page defines cost per conversion as your total cost divided by the number in your Conversions column, calculated only on eligible interactions, so clicks that can’t be tracked for conversions are left out (Understand your conversion tracking data).

A “conversion” is whatever action the account was set up to count: often a call of a certain length or a form fill. That’s a lead, not a customer, and it doesn’t know whether the call booked, whether the job ran or whether the caller was a customer you already had. Use cost per conversion to manage the ad account, and your own books and field software for cost per new customer. If the two are far apart, the gap is usually booking, follow-up or lead quality, and clicks without calls covers one end of that.

Why can my cost per lead look good while my cost per customer is bad?

Because cheap leads that don’t book, or book small, can cost more per customer than expensive leads that do. ServiceTitan’s help page walks through this with its own example: an agency reports its lowest cost per lead ever, $50, but the campaigns behind it bring in little revenue, the average ticket is only $59 (the dispatch fee), and the business is losing money on the ads. The cause in that example was the budget drifting toward “cheap” repair searches.

Plumbing has the same trap, in our view: searches and offers that attract price shoppers fill the call log and the low end of the schedule. The fix is to judge each channel by cost per new customer and by the size of the jobs it brings, not by cost per lead alone.

How often should I work it out, and what moves the number?

Monthly, at the same time you review the marketing. In our judgement, four things move it more than anything else:

• Booking rate: the share of real leads that make it onto the schedule. Every lead that doesn’t book raises the cost of the ones that do.
• Run rate: booked jobs that get cancelled are paid-for leads that never turn into customers.
• Lead quality: out-of-area callers, wrong services and price shoppers.
• Spend: more spend in a fixed market usually means each extra customer costs more than the last, which is worth checking before you double a budget.

The first three are usually cheaper to fix than the fourth. How much to spend on marketing each month covers setting the budget itself.

What's different about acquisition cost for plumbers

Ticket sizes are far apart. A plumbing shop sells drain clears, fixture repairs, water heater replacements, repipes and sewer lines, often off the same ads. A cost per new customer that’s fine for a water heater replacement can be ruinous on a drain call. In our judgement, it’s worth working out a separate cost for your big-ticket work: marketing cost for those campaigns divided by sold big jobs.

Emergencies skew the first invoice. An emergency call often lands as a single repair. Whether that customer comes back for the water heater next year depends on how the job went and whether you stay in touch, so the first invoice undersells many plumbing customers. Treat it as the floor.

Some new customers come through accounts. Commercial accounts, property managers and home warranty dispatch bring in work you didn’t market for in the usual way. Give them their own lines so they don’t make your advertising look cheaper than it is.

A worked example: one month, four channels

These numbers are made up to show the math, not a benchmark for your market. Say one month looks like this:

• Google Ads: $2,400 in ad spend plus $600 of management fees, $3,000 in total, and 20 new customers. That’s $150 per new customer.
• Local Services Ads: $1,500 charged, $300 credited, so $1,200 in cost, and 10 new customers. That’s $120 per new customer.
• Direct mail: $1,600 for printing and postage, and 4 new customers. That’s $400 per new customer.
• Referrals and the Google profile: no spend, and 24 new customers.

Total marketing cost is $5,800 for 58 new customers: a blended $100 per new customer, which looks fine. Now say the average first invoice is $380. Google Ads and LSAs win customers for well under the first ticket. The mailer is spending $400 to win a customer whose first job brings in $380, before parts and labor, so it only makes sense if those customers come back or buy bigger work. The blended number hid that.

Frequently asked questions

Should I include my own time in customer acquisition cost?

If you spend real hours on marketing every week, put a value on them, at least in a separate line. Otherwise the channels you run yourself look free when they aren’t.

Is customer acquisition cost the same as cost per lead?

No. Cost per lead divides spend by calls, forms and messages; customer acquisition cost divides it by first-time customers who paid you. It’s always the higher of the two, because not every lead books, runs and pays.

Do repeat customers count?

Not in customer acquisition cost. Track them in their own line, since a repeat job usually costs little or nothing in marketing, and mixing them in makes your marketing look cheaper than it is.

What if I can't tell where a customer came from?

Put them in an unknown line and keep the line visible. If it’s large, fix the lead source step at the office before trusting any per-channel number.

Should the agency fee be in the number?

Yes. Ad spend and the fee to manage it are both costs of winning the customer, so a channel’s cost is the spend plus its share of the fee.

How many new customers do I need before the number means anything?

There’s no fixed count, but a channel with only one or two new customers a month will swing wildly. Look at it over three months before cutting or doubling it.

Key takeaways

• Cost per new customer = marketing costs for the month ÷ first-time customers who paid you that month.
• Include ad spend, LSA charges after credits, agency and software fees, print and mail, and marketing wages; leave out job costs.
• Count new paying customers with a lead source attached, not calls, leads or repeat customers.
• Work it out per channel and blended; a healthy blended number can hide one channel losing money.
• Compare each channel with what a new customer’s first job brings in, and treat that first job as the floor.
• Google Ads’ cost per conversion is a lead cost, not a customer cost.

More in this section

• How do I get more plumbing leads?
• How should a new plumbing company get its first customers?
• How much should a plumbing company spend on marketing each month?
• Should I hire a plumbing marketing agency or do it myself?
• How much can I afford to pay for a plumbing lead?

Sources

1. Use Marketing Pro Ads Analytics — ServiceTitan Help
2. Add marketing campaigns in ServiceTitan — ServiceTitan Help
3. Understand your conversion tracking data — Google Ads Help
4. Lead Source Report — Jobber Help Center
5. How to Use Lead Sources — Housecall Pro Help Center
6. Unique Callers report — CallRail Help Center
7. About Automated Local Services Ads lead credits — Google Local Services Help