Average Banking Customer Acquisition Cost

Most banks, especially local banks, are not tracking their average customer acquisition cost (CAC) as granularly as they should be. Breaking down CAC into individual categories such as loan type and service allows the bank to understand precisely where their advertising is yielding the highest ROI. Below, we have listed the average CAC for banks by:

Calculating CAC & Defining Organic/Paid Channels

When calculating CAC, we use the following formula:

CAC = Total Spend on Sales/Marketing ÷ Customers Acquired

Additionally, you will see us segment CAC between organic and paid channels. The distinction between organic and paid channels is as follows:

  • Organic (Earned Traffic): These channels include SEO, social media, email marketing, and other forms of marketing where it does not cost incrementally more money to gather more ad impressions. 
  • Paid (Bought Traffic): These channels include Google & Meta Ads, radio ads, TV ads, print ads, and other forms of marketing where to reach more people, more money must be spent in a generally linear fashion.


Average CAC by Loan Type

Our team has analyzed the CAC for each primary loan type and then split the data by organic and paid advertising channels. 

Loan TypeOrganicPaid
Mortgage Loans$1,961$3,643
Personal Loans$196$364
Auto Loans$261$486
Student Loans$152$283
Business Loans$1,307$2,429
Home Equity Loans$654$1,214


Average CAC by Loan Size

CACs by loan size are heavily influenced by the demand for the loans of each size.

Loan SizeRangeOrganicPaid
Micro$500 - $5,000$26$49
Small$5,001 - $25,000$109$202
Medium$25,0001 - $100,000$305$567
Large$100,0001 - $500,000$871$1,619
Very Large$500,001 - $1,000,000$1,961$3,643
Jumbo$1,000,001 - $5,000,000$5,664$10,526
Super Jumbo$5,000,001 +$8,714$16,193


Average CAC by Account Type

Generally advertising for specific accounts requires a special incentive for marketing to be effective. 

Account TypeOrganicPaid
Checking Accounts (Individual)$152$283
Checking Accounts (Business)$327$607
Savings Accounts (Individual)$87$162
Savings Accounts (Business)$196$364
Certificates of Deposit (CDs)$174$324
Money Market Accounts$152$283
Retirement Accounts (IRA, 401k)$436$810


Average CAC by Income Demographic

These ranges will vary based on the overall affluence of the location. 

Income DemographicAnnual IncomeOrganicPaid
Low Income< $25,000$65$121
Lower-Middle Income$25,000 - $49,999$131$243
Middle Income$50,000 - $74,999$261$486
Upper-Middle Income$75,000 - $99,999$436$810
High Income$100,000 - $149,999$697$1,295
Very High Income$150,000 - $199,999$1,307$2,429
Affluent$200,000 +$3,050$5,668


Average CAC by Service

Each service will have a different CAC based on supply and demand. We recommend segmenting advertising by service to ensure you are allocating budgets effectively to in-demand services. 

Wealth Management$1,525$2,834
Financial Advisory Services$871$1,619
Credit Card Services$240$445
Investment Services$1,198$2,227
Insurance Services$305$567


Average CAC by Location

Generally, acquiring customers in primary financial regions will be more expensive due to the larger average customer size. 

Financial CapitalsNew York City, Tokyo$1,525$2,834
Primary CitiesLos Angeles, Chicago$980$1,822
Secondary CitiesCharlotte, Lyon$654$1,214
Tertiary CitiesRaleigh, Austin$457$850
Rural AreasScottsbluff, Sandpoint$174$324


Average CAC by Channel

See the averaged CAC by channel for the most common advertising channels we have collected data for. 

Social Media$398
Influencer Partnerships$477
Online Paid Ads$557
Direct Mail$636


Tracking ROI Across Advertising Channels

For all banks, we recommend tracking various campaigns as granularly as possible. This can be done using various tracking software such as Google Analytics in addition to segmenting leads by service, so conversion rates can be tracked as well. This is beneficial because there is a high chance that if your marketing campaigns are unprofitable as a whole, it is just a few components of the marketing campaign moving the average CAC upwards, and there are some profitable campaigns running. 

We also recommend tracking your CAC:LTV (customer lifetime value) ratio. Generally, you should spend up to $1 in advertising to acquire $5 in revenue over the lifetime of a customer. If the CAC to ratio is too high, say 1:10, it means your marketing is too efficient and you are leaving customers on the table. But, if your CAC:LTV ratio is 1:2 or 1:3, you should scale back the campaigns until you have a strategy to either lower CAC or raise LTV.

Focus Digital specializes in lowering CAC for banks and other businesses through thought leadership-based SEO campaigns and website conversion optimization. If you would like a strategy call to discuss where your biggest opportunities are, feel free to reach out to us on our Contact Us page.