Know-How Exchange : Strategy

Everyone calculates the numbers differently, and every business is a little different, so even if we came up with a number it would be meaningless.

In many companies, the thing you're calling "sales expense" can approach 100% of sales, and perhaps there's no profit at all. In other cases, the number is much smaller -- perhaps less than 10%. (You're at 11%, if I understand correctly.)

Thus it would seem that you are near the low end ... but that doesn't mean it couldn't be much better. It kind of depends on whether you have other costs-of-goods and how great that is. In many service businesses, there isn't much cost-of-goods, so whatever isn't sales expense is profit.

And some companies can't really separate the sales expense from the actual cost of delivering the service, so that would be a key factor too.

Net: There really is no helpful answer to your question. "Services Businesses" is just too broad a category. It can cover travel agents, law firms, lone-wolf consultants, in-store marketing companies, and hundreds of other kinds of businesses -- even energy management companies.

Can you share a little more detail?

What is the average (and range) of the total selling price? Are salespeople on commission? What are the gross margin and variable margin? Is it a single product/service or a portfolio? Is the purchase a frequent one, or a one-time-only purchase? Is it a razor-and-blades sale? Is it a complex sale (with many influencers) or is it relatively straightforward? Etc.

Each of these will impact the acquisition cost, as you can imagine. I'd love to help you, but it's hard to do much without knowing the specifics.