Customer acquisition cost is what you spend on marketing and sales to win one new customer. It decides how much you can afford to pay for ads, how long a customer must stay before they are profitable and whether the business scales. Enter the marketing and sales spend for a period and the customers you won in that period; the calculator returns the blended CAC, the marketing-only and sales-only figures, and, if you add a lifetime value, the LTV:CAC ratio that investors look at first.
CAC Calculator
Customer acquisition cost is the total you spend on marketing and sales in a period, divided by the number of new customers that spend produced. The CAC calculator keeps the two budgets separate so you can also see the marketing-only and sales-only cost per customer. Spending $12,000 on marketing and $8,000 on sales to win 50 customers is a blended CAC of $400.
The number only means something next to what a customer is worth. Enter a lifetime value and the calculator adds the LTV:CAC ratio; the usual rule of thumb is 3:1 or better for a healthy business, with anything under 1:1 meaning you lose money on every customer you win. Use the LTV calculator to work out the value side, and measure CAC over at least a quarter, because a single month of spend and sign-ups rarely line up.
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Frequently Asked Questions
What should I include in acquisition cost?
Everything spent to win customers in the period: ad spend, agency and freelancer fees, marketing software, content production, sales salaries and commissions, and sales tools. Leave out the cost of serving customers after they sign up.
What is a good CAC?
There is no universal number; a good CAC is one that is a small fraction of the customer's lifetime value. The common target is an LTV:CAC ratio of at least 3:1.
Blended or paid CAC?
Blended CAC divides total spend by all new customers, including organic ones. Paid CAC counts only customers and spend from paid channels, so it is higher and shows what an extra ad dollar really buys. Enter the matching pair of numbers for the one you want.
