Customer Acquisition Cost (CAC) Calculator

Customer acquisition cost is the average amount you spend to win one new customer. It is calculated by dividing your total sales and marketing spend over a period by the number of new customers acquired in that period.

Include everything spent to acquire customers: ad spend, marketing salaries and tools, sales team costs and commissions, agency fees and content. The more fully you count these, the more honest your CAC is.

It compares customer lifetime value to acquisition cost. A ratio of 3:1 is a common healthy benchmark, meaning a customer is worth three times what they cost to acquire. Below 1:1 you lose money on every customer; far above 3:1 you may be underinvesting in growth.

There is no single good number because it depends on your price point and margins. CAC is only meaningful next to lifetime value, so judge it by your LTV to CAC ratio and how quickly each customer pays back what they cost.

Improve conversion rates so the same spend wins more customers, lean on lower-cost channels like referrals and organic search, sharpen your targeting, and raise retention so word of mouth does more of the work.