CAC Calculator
Customer acquisition cost from your sales and marketing costs, with payback period and LTV to CAC ratio.
Your customers
Filled in with example values. Replace them with your own.
Optional
How long a customer takes to pay back what it cost to win them, and their value over time.
Currency symbol
Results update as you type.
Result
CAC: $269.41 per customer ($22,899.50 ÷ 85)
Customer acquisition cost
$269.41per customer
- Total sales and marketing cost
- $22,899.50
Where the cost comes from
- Advertising$141.18 per customer
- $12,000.00
- Sales salaries$100.00 per customer
- $8,500.00
- Tools and software$28.23 per customer
- $2,399.50
- Total
- $22,899.50
How it’s calculated
Total cost
$12,000.00 + $8,500.00 + $2,399.50 = $22,899.50
CAC
$22,899.50 ÷ 85 = $269.41
How the CAC calculator works
List your sales and marketing costs for a period and enter how many new customers you won in that period. The calculator divides the total cost by the number of customers to give the customer acquisition cost (CAC), and shows which costs make up most of it.
Add the average monthly revenue per customer and your gross margin to see how many months a customer takes to pay back their cost, and an average customer lifetime to compare lifetime value with CAC.
The formulas
CAC = Sales and marketing costs ÷ New customers
Monthly gross profit = Revenue a month × Gross margin %
Payback (months) = CAC ÷ Monthly gross profit
LTV = Monthly gross profit × Customer lifetime (months)
Worked example
In a quarter, a business spends 12,000 on ads, 8,500 on sales pay and2,399.50 on tools, and wins 85 new customers:
- Total cost: 12,000 + 8,500 + 2,399.50 = 22,899.50
- CAC: 22,899.50 ÷ 85 = 269.41 per customer
Each customer pays 45 a month at a 70% gross margin and stays 24 months on average:
- Monthly gross profit: 45 × 70% = 31.50
- Payback: 269.41 ÷ 31.50 = 8.6 months
- LTV: 31.50 × 24 = 756.00, so LTV : CAC = 2.81 : 1
Assumptions and limitations
- Money amounts are rounded half up to the cent; payback uses the unrounded CAC.
- Costs and customers are assumed to belong to the same period. Long sales cycles can make them drift apart.
- Lifetime value uses a simple average lifetime, with no churn curve and no discounting.
- No benchmark ratios are built in.
Frequently asked questions
What costs go into CAC?
Everything spent winning new customers in the period: advertising, the pay of sales and marketing staff, tools and software, agencies, events and promotions. Including only ad spend gives a lower figure that is sometimes called paid CAC.
Which customers should I count?
New customers won in the same period as the costs. Returning customers and customers who came without any sales or marketing effort are usually left out, but say which you include so the figure can be compared over time.
What is the payback period?
How many months of gross profit from a customer it takes to cover what it cost to win them. A shorter payback means money spent on growth comes back sooner.
How is lifetime value worked out here?
As monthly gross profit per customer times the average number of months a customer stays. Both are your own figures; the calculator does not assume a churn rate or discount future profit.
What is a good LTV to CAC ratio?
A ratio above 1 means a customer brings in more gross profit than they cost to win. How much higher it needs to be depends on your other costs and how quickly you need the money back, so compare it with your own targets.