👥 CAC Calculator
Calculate your Customer Acquisition Cost
CAC = (Marketing + Sales Costs) ÷ New Customers
Use our free customer acquisition cost calculator to determine how much you spend to acquire a new customer. Enter your total marketing and sales expenses, divide by the number of new customers acquired, and get your CAC instantly.
How to Use This CAC Calculator
This calculator offers three modes:
Calculate CAC (default):
- Enter your marketing costs (ads, content, tools)
- Enter your sales costs (salaries, commissions, software)
- Enter number of new customers gained in the same period
- See your cost per customer instantly
LTV:CAC Ratio:
- Enter your customer lifetime value
- Enter your CAC
- See if your ratio is healthy (aim for 3:1 or higher)
Marketing Budget:
- Enter your target CAC
- Enter desired new customers
- See the total budget needed
Use our cac calculator to remove guesswork from your customer acquisition strategies.
What is Customer Acquisition Cost?
Customer acquisition cost (CAC) is a key metric that shows how much your company spends to acquire a customer. It includes all costs associated with marketing and sales efforts — from paid ads to sales team salaries.
Understanding customer acquisition costs helps you determine how much it costs to acquire one new customer and whether your marketing channels are profitable.
CAC Formula — How to Calculate CAC
The cac formula is straightforward:
CAC = Total Marketing and Sales Expenses ÷ Number of New Customers Acquired
For example, if you spent $15,000 on marketing and sales and gained 100 customers:
$15,000 ÷ 100 = $150 per customer
This calculation tells you the average cost of acquiring a customer through your marketing efforts.
CAC Calculation Example
Here’s a detailed cac calculation example:
| Cost Type | Amount |
|---|---|
| Paid Ads | $8,000 |
| Content Marketing | $2,000 |
| Sales Salaries | $4,000 |
| Sales Tools | $1,000 |
| Total | $15,000 |
New customers acquired: 100
CAC = $15,000 ÷ 100 = $150
This means you spend $150 to acquire each new customer.
CAC and LTV — The Critical Metric
The relationship between CAC and LTV (customer lifetime value) determines if your business model is sustainable. LTV represents the value of a customer over their lifetime with your company.
The ltv to cac ratio benchmark:
- 3:1 or higher — Healthy, room to grow
- 2:1 — Acceptable, needs optimization
- 1:1 or lower — Unsustainable, losing money
If your customer lifetime value is higher than your cac, you can profitably acquire new customers. If LTV equals CAC, you break even. If CAC is higher, you’re losing money on every customer.
What is a Good CAC? Benchmark Data
CAC varies widely by industry:
| Industry | Average CAC |
|---|---|
| SaaS | $200 – $500 |
| Ecommerce | $50 – $150 |
| Finance | $300 – $700 |
| Real Estate | $400 – $1,000 |
Compare cac against your industry benchmark, but more importantly, compare it to your own customer lifetime value. A high cac is fine if LTV is much higher.
How to Optimize Your CAC
Strategies for lower cac:
- Improve conversion rate — better targeting the right audience
- Focus on high-performing marketing channels
- Optimize your marketing spend allocation
- Build relationships with your customers for referrals
- Retain existing ones — customer retention is cheaper than acquiring new
The goal is to acquire a customer for less than the gross profit per customer you’ll earn over time.
Understanding Customer Lifetime Value (CLV)
CLV (or LTV) measures how much a customer is worth over their entire relationship with your business. To calculate the cost effectiveness of acquisition, you need to determine:
- Average order value
- Purchase frequency
- Customer behavior and retention rates
If a customer generates $500 over their lifetime and costs $100 to acquire, your ltv to cac ratio is 5:1 — excellent for business growth.
CAC Payback Period
CAC payback period shows how long until a new customer “pays back” their acquisition costs. Calculate it by dividing CAC by monthly gross profit per customer.
Example:
- CAC: $300
- Monthly profit per customer: $50
- Payback period: 6 months
Shorter payback means faster reinvestment into acquiring new customers.
Client Acquisition Cost by Marketing Channel
Different marketing channels have different costs:
| Channel | Typical CAC |
|---|---|
| Organic/SEO | Low |
| Content Marketing | Medium |
| Paid Social | Medium-High |
| Paid Search | High |
| Sales Team | Highest |
Track acquisition costs by channel to optimize your marketing budget. Spend more on channels with lower cac and higher customer quality.
Frequently Asked Questions
How do I calculate customer acquisition cost?
Divide your total marketing and sales expenses by the number of new customers acquired in the same period.
What is a good LTV:CAC ratio?
A ratio of 3:1 or higher is considered healthy. This means your customer lifetime value is at least 3x your cost to acquire them.
How can I lower my CAC?
Improve conversion rates, focus on organic marketing channels, optimize ad targeting, and encourage customer referrals.
Why is CAC important?
CAC is a critical metric that tells you if your customer acquisition strategies are sustainable. If you spend more to acquire a customer than they’re worth, you’ll lose money.
What’s the difference between CAC and CPA?
CAC includes all marketing and sales costs divided by customers acquired. CPA (cost per acquisition) often refers to a single campaign or action.
How does CAC affect product or service pricing?
Your pricing must generate enough gross profit to cover CAC and still be profitable. Understanding CAC helps set sustainable prices.