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Marketing / Customer Acquisition Cost Calculator

Customer Acquisition Cost Calculator

What it costs to win one new customer from your marketing and sales spend, and how that compares with what they're worth.
$

Enter a number of at least 0

Ads, content, tools and agency fees for the period.

$

Enter a number of at least 0

Sales salaries, commissions and sales tools for the same period.

Enter a whole number

$

Enter a number of at least 0

Gross profit per customer over the relationship. Adds LTV:CAC.

$

Enter a number of at least 0

Adds the CAC payback period.

Customer acquisition cost
$200.00
4.5 : 1LTV:CAC
3.3 monthspayback
$133.33marketing CAC
$0total spend $9,000.00
  • Marketing
  • Sales
Marketing spend$6,000.00
Sales spend$3,000.00
Total acquisition spend$9,000.00
New customers45
Cost per new customer$200.00

You earn back the acquisition cost in about 3.3 months of gross profit.

See breakdown

How the customer acquisition cost calculation works

  1. Add up acquisition spend for one period

    Include ads, content, tools, agency fees, sales pay and commissions for the month or quarter. $6,000 of marketing and $3,000 of sales is $9,000.

  2. Divide by new customers won in that period

    Count only new customers and leave out repeat buyers. $9,000 ÷ 45 is a $200 CAC.

  3. Compare with lifetime value

    Lifetime value ÷ CAC gives the LTV:CAC ratio. $900 ÷ $200 is 4.5 : 1.

  4. Check the payback period

    CAC ÷ monthly gross profit per customer. $200 ÷ $60 means about 3.3 months to earn back the cost.

Worked example. A business spends $6,000 on marketing and $3,000 on sales in a quarter and wins 45 new customers. CAC is $9,000 ÷ 45 = $200. With a $900 lifetime value that's 4.5 : 1, and at $60 gross profit a month the cost is earned back in 3.3 months.

Customer Acquisition Cost FAQ

What is customer acquisition cost (CAC)?

CAC is the average amount you spend on marketing and sales to win one new customer in a period. It tells you whether each new customer is worth what it costs to bring them in.

What is the customer acquisition cost formula?

CAC = total marketing and sales spend ÷ new customers won in the same period. $5,000 spent for 25 new customers is a $200 CAC.

What should be included in CAC?

Ad spend, marketing tools, agency and freelancer fees, and the share of salaries and commissions spent on winning new customers. Leave out costs of serving existing customers.

What is a good CAC?

There is no official standard, because it depends on what a customer is worth to you. CAC must be below a customer's lifetime gross profit, or every new customer loses money. The further below it is, and the faster you earn it back, the more room you have for overheads. Targets quoted online are rules of thumb, not benchmarks.

Is CAC the same as cost per acquisition (CPA)?

Not quite. CPA is usually the cost of one conversion in a single campaign, such as a lead, sign-up or sale. CAC counts all marketing and sales spend, including salaries and tools, against paying new customers only, so it is normally higher.

What is blended CAC?

CAC worked out on all new customers, including those who found you through word of mouth or search. Paid CAC divides only paid marketing spend by the customers those ads brought in, so it is higher than blended CAC.

What is the CAC payback period?

The months of gross profit a new customer needs to repay what it cost to win them: CAC ÷ monthly gross profit per customer.

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