Customer Acquisition Cost (CAC) Calculator
Enter your marketing cost, sales cost and number of new customers to find the average cost of winning one customer.
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Customer Acquisition Cost (CAC) Calculator
Our Customer Acquisition Cost (CAC) Calculator shows how much your business spends, on average, to win one new customer. Enter what you spent on marketing, what you spent on sales and how many customers you gained in the same period. It is built for founders, marketers, finance teams and anyone who needs to check that growth is paying for itself.
Quick answer
Customer acquisition cost is (marketing cost + sales cost) ÷ new customers: (10,000 + 5,000) ÷ 800 = 18.75 per customer.
- Meaning: the average sales and marketing spend behind each new customer.
- Lower is better: a falling CAC means each customer is cheaper to win.
- Same period: costs and customers must cover the same month, quarter or year.
- Rule of thumb: lifetime value of about 3 times CAC is widely treated as healthy.
What Is Customer Acquisition Cost (CAC)?
Customer acquisition cost (CAC) is the total sales and marketing spend needed to gain one new customer in a given period. It shows how efficiently a company turns spending into customers:
÷ New customers
A company that spends 10,000 on marketing and 5,000 on sales, and gains 800 customers, has a CAC of 18.75. A low CAC means customers are cheap to win. A high CAC is only a problem when customers do not bring back more than they cost.
How to Calculate CAC
= (2,000 + 17,500) ÷ 1,120
= 19,500 ÷ 1,120
≈ 17.41
- Pick a period. A month, a quarter or a year.
- Add up marketing costs. Ads, content, tools, agencies and marketing salaries for that period.
- Add up sales costs. Sales salaries, commissions, CRM software and training for that period.
- Count new customers. Only customers gained in the same period, not existing ones.
- Divide. Total cost ÷ new customers is the CAC.
What Goes Into CAC
| Marketing costs | Sales costs |
|---|---|
| Paid advertising (search, social) | Sales team salaries |
| Content marketing | Commissions and bonuses |
| SEO and email tools | CRM software |
| Influencer partnerships | Sales training |
| Promotional discounts | Sales enablement tools |
The third input is the number of new customers gained in the same timeframe. The more completely you count acquisition costs, the closer the result is to your true cost per customer.
CAC Examples
SaaS company. Marketing 10,000, sales 5,000, 800 new customers:
If each customer pays 30 a month and stays 12 months, lifetime revenue is 360 per customer, far above the 18.75 it cost to win them.
E-commerce brand. Marketing 25,000, sales 15,000, 3,000 new customers:
≈ 13.33
With an average first order of 60 and some repeat purchases, a 13.33 cost per customer is comfortable.
| (Marketing + Sales) ÷ Customers | CAC |
|---|---|
| (5,000 + 3,000) ÷ 400 | 20.00 |
| (10,000 + 5,000) ÷ 900 | 16.67 |
| (15,000 + 7,000) ÷ 1,200 | 18.33 |
| (20,000 + 10,000) ÷ 1,600 | 18.75 |
| (25,000 + 15,000) ÷ 2,000 | 20.00 |
Spending more does not always bring customers in proportion. CAC falls from 20.00 to 16.67, then climbs back to 20.00 as the budget grows.
CAC vs Customer Lifetime Value
CAC only tells you whether growth is affordable when it is set against customer lifetime value (LTV, also called CLV): the gross profit a customer brings over the whole relationship.
300 ÷ 100 = 3, or 3:1
- About 3:1 is the commonly quoted target: 3 earned for every 1 spent on acquisition.
- Near 1:1 or below means customers cost as much as they return. Review channels, pricing or retention.
- Far above 3:1 can mean you are under-investing in growth.
CAC also varies by industry. Businesses with long sales cycles and large deals, such as B2B software, tend to have a higher CAC than online shops with quick purchase decisions. Compare against your own history and your own sector.
How to Reduce CAC
- Refine your audience. Target the people most likely to convert and cut wasted ad spend.
- Improve conversion rates. Better landing pages, checkouts and calls to action turn the same traffic into more customers.
- Use retargeting. People who already know your brand often convert at a lower cost.
- Invest in organic channels. SEO, content and community build slowly but bring low-cost customers for years.
- Encourage referrals. Happy customers bring new ones for little spend.
- Streamline sales. Automate repetitive tasks and focus the team on high-value prospects.
When to Recalculate CAC
| Frequency | Purpose |
|---|---|
| Monthly | Check how recent campaigns performed. |
| Quarterly | See seasonal patterns and promotions. |
| Annually | Judge long-term efficiency and growth. |
Regular checks catch a rising CAC early, before it eats into profit.
Common Mistakes
- Mismatched periods. Dividing a quarter of costs by one month of customers inflates CAC.
- Leaving out salaries and tools. Ad spend alone gives a cost per acquisition for a campaign, not a full CAC.
- Counting existing customers. Renewals and repeat buyers are not new customers.
- Ignoring the sales cycle. If deals take months to close, this month's spend may produce next quarter's customers.
- Reading CAC alone. Always set it against lifetime value or payback time.
Key Terms
- CAC
- Customer acquisition cost: sales and marketing spend per new customer.
- LTV (CLV)
- Customer lifetime value: what a customer is worth over the whole relationship.
- LTV:CAC
- Lifetime value divided by CAC. About 3:1 is the usual target.
- CAC payback
- The months of profit from a customer needed to earn back their CAC.
- Blended CAC
- CAC across all channels, paid and organic together.
How to Use the Customer Acquisition Cost (CAC) Calculator
- Enter the cost of marketing. Type everything spent on ads, promotions and marketing tools in the period, such as 10,000.
- Enter the cost of sales. Type the cost of your sales team in the same period, including salaries, commissions and CRM tools, such as 5,000.
- Enter the number of new customers. Type how many customers you gained in that period, such as 800. Commas are fine.
- Read and copy the result. The CAC appears as you type, with the working, total spend and the marketing and sales cost per customer. Press Copy to copy it, or Clear or Esc to start again.
Example: cost of marketing 2,000, cost of sales 17,500 and 1,120 new customers. The result is about 17.41, from (2,000 + 17,500) ÷ 1,120, so the business spends about 17.41 to win each customer.
Who Can Use This Calculator?
Frequently Asked Questions (FAQs)
How do you calculate customer acquisition cost?
Add the cost of marketing and the cost of sales for a period, then divide by the number of new customers gained in that period. CAC = (marketing cost + sales cost) ÷ new customers.
What is the CAC if I spend 10,000 on marketing and 5,000 on sales to gain 800 customers?
The CAC is 18.75. (10,000 + 5,000) ÷ 800 = 15,000 ÷ 800 = 18.75 per new customer.
What expenses should be included in CAC?
Include every cost tied to winning new customers: advertising, content, SEO and email tools, agency fees and marketing salaries, plus sales salaries, commissions, CRM software and training. Leave out costs of serving existing customers.
How can I tell if my CAC is too high?
Compare it with customer lifetime value (LTV). A lifetime value of about three times CAC (3:1) is the commonly quoted target. If CAC is close to or above lifetime value, review your channels, conversion rates or pricing.
Does CAC vary by industry?
Yes. CAC depends on audience, sales cycle length, competition and deal size. B2B software companies with long sales cycles usually have a higher CAC than e-commerce brands with quick purchase decisions, so compare against your own sector and history.
What is the difference between CAC and CPA?
CAC counts all sales and marketing costs per new paying customer. Cost per acquisition (CPA) usually measures the ad cost of one conversion in a campaign, and that conversion may be a lead or sign-up rather than a customer.
How can a business lower its CAC?
Target audiences that convert, improve landing pages and checkout, use retargeting, build organic channels such as SEO and content, run referral programs and automate routine sales work.
Is the Customer Acquisition Cost Calculator free?
Yes. It is completely free, needs no sign-up, and can be used as many times as you like.
Sources
- Corporate Finance Institute. Customer Acquisition Cost (CAC).
- Wall Street Prep. Customer Acquisition Cost (CAC).
- Wall Street Prep. LTV/CAC Ratio.
- Shopify. Customer Acquisition Cost (CAC): Calculate and Reduce It.
Try our Customer Acquisition Cost Calculator to find your cost per new customer in seconds.