Customer Acquisition Cost Calculator
Calculate your customer acquisition cost (CAC) and LTV:CAC ratio. Enter marketing spend, sales spend, and new customers acquired to measure growth efficiency and unit economics.
Enter total marketing spend, sales spend, and customers acquired in a period to calculate customer acquisition cost (CAC). Optionally add customer lifetime value (CLV) to see your LTV:CAC ratio.
Ads, content, and brand building in period
Sales team, outreach, and SDR costs
New customers in same period
Total profit from one customer over lifetime
Formula
CAC = (Marketing Spend + Sales Spend) ÷ Customers Acquired | LTV:CAC Ratio = Customer Lifetime Value ÷ CAC
CAC (Customer Acquisition Cost) is the average cost to acquire one new customer. It combines all marketing and sales spending over a period divided by new customers acquired. The LTV:CAC ratio compares customer lifetime value to acquisition cost — a ratio of 3:1 or higher is considered healthy for most SaaS and e-commerce businesses.
Worked Example
Marketing spend: $50,000 · Sales spend: $25,000 · Customers acquired: 500 · CLV: $150
Marketing spend: $50,000
Sales spend: $25,000
Total spend: $75,000
Customers acquired: 500
CAC: $75,000 ÷ 500 = $150 per customer
Marketing cost per customer: $50,000 ÷ 500 = $100
Sales cost per customer: $25,000 ÷ 500 = $50
CLV: $150
LTV:CAC Ratio: $150 ÷ $150 = 1:1
You spent $150 per customer acquired. If each customer is worth $150 in lifetime profit, the LTV:CAC ratio is 1:1 — a breakeven benchmark. Ideally, this ratio should be 3:1 or higher. To improve: reduce CAC through better targeting, increase CLV by raising prices or improving retention.
Frequently Asked Questions
When to use this calculator
- →Measuring unit economics and growth efficiency of your business
- →Evaluating whether your acquisition channels are sustainable and profitable
- →Planning marketing budgets and setting acquisition cost targets
- →Comparing CAC across channels to identify which are most efficient
Common mistakes
- ✕Not including all acquisition-related costs (salaries, tools, content, events) — this understates CAC
- ✕Using CAC without comparing it to CLV or margin — low CAC alone does not guarantee profitability
- ✕Calculating CAC for different time periods without consistency — compare month-to-month or quarter-to-quarter, not a mix
- ✕Mixing organic and paid customer acquisition — separate CAC for each channel to optimize spend
Responsible use note
CAC is a metric for efficiency and unit economics — it shows how much you spend to acquire customers, but does not by itself determine profitability. Always compare CAC to customer lifetime value and gross margin. A low CAC on a low-margin product may not be sustainable. This is for analysis and planning purposes only and not financial or investment advice.
Frequently asked questions
Should I calculate CAC for the entire business or by channel?
Calculate by channel first: Google Ads CAC, Facebook CAC, organic CAC, referral CAC, etc. This shows which channels are most efficient and where to allocate budget. Calculate total company CAC for overall business health.
How is CAC different from cost per acquisition (CPA)?
CAC and CPA are often used interchangeably, but CAC typically includes all marketing and sales costs company-wide, while CPA often refers to a specific campaign or ad platform metric. Use consistent definitions in your business.
What time period should I use for CAC?
Use consistent periods: monthly, quarterly, or annually. Monthly CAC is most current but more volatile. Quarterly or annual CAC smooths out seasonal fluctuations and is more reliable for trends.
How do I interpret LTV:CAC ratio?
LTV:CAC of 3:1 is a common benchmark — each customer is worth $3 for every $1 spent. Ratios below 1:1 mean you spend more to acquire than they are worth. Ratios 5:1+ indicate strong unit economics.
How does CAC relate to payback period?
CAC payback period = CAC ÷ (Monthly profit per customer). If CAC is $150 and monthly profit is $10, payback is 15 months. Lower payback (faster recovery of acquisition cost) is better. SaaS typically targets 12 months or less.
Can I reduce CAC without reducing customer quality?
Yes. Improve targeting to reach high-intent customers, optimize ad creative and messaging, improve landing page conversion rates, leverage organic channels, and automate parts of the sales process. Test and measure each change.