Customer Acquisition Cost Calculator
Enter your marketing and sales expenses for a period and the number of new customers you won in the same period. You get your customer acquisition cost (CAC) instantly.
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Enter your marketing expenses, sales expenses and new customers to see your CAC.
What this means
How the CAC calculation works
Customer acquisition cost (CAC) is what it costs, on average, to win one new customer. You add up what you spent on marketing and sales in a period and divide by the number of new customers you won in that same period.
The time period matters. If you choose "month", use that month's costs and that month's new customers. Mixing a quarter of spending with a month of customers will give a number that means nothing. Count only new customers, meaning people who bought from you for the first time in the period, not repeat buyers.
Worked examples
These figures are made up to show the arithmetic. They are not a benchmark.
- Marketing expenses: 4,000. Sales expenses: 2,000. New customers: 30.
- Total spend = 4,000 + 2,000 = 6,000.
- CAC = 6,000 / 30 = 200 per new customer.
- Marketing expenses: 1,200. Sales expenses: 0. New customers: 4.
- CAC = 1,200 / 4 = 300.
- The spend was lower, but so were the results, so each customer cost more. This is why CAC is worth checking every period.
What counts as an acquisition cost
Marketing: advertising spend, content creation, design, email and social tools, events, and agency or freelancer fees. Sales: salaries or commissions of people who sell, your CRM, tools used for proposals and demos, and travel to meet prospects. Be consistent from one period to the next, because a trend is only meaningful when you measure it the same way each time. If you spend much of your own time on selling, you can include a value for it, as long as you do it every time.
Using CAC: compare it with what a customer brings
A CAC figure on its own does not say whether you are doing well. It matters in relation to what a customer is worth to you. Compare it with the gross profit a customer brings, and our Customer Lifetime Value Calculator helps with that side of the comparison. A simple way to put the two together is the payback period:
For example, a CAC of 200 and a gross profit of 25 per customer per month means about 8 months to earn the money back (200 / 25). Whether 8 months is acceptable depends on how long customers stay and how much cash you have, so use your own numbers rather than a general rule. Our guide to unit economics walks through this thinking.
What this calculator cannot tell you
- Timing. Sales can take weeks or months, so this month's spend may win customers next month. Looking at a longer period smooths this out.
- Blended average. One number covers every channel. A channel that works well can hide one that does not. If you can, calculate CAC per channel.
- Free customers. Word of mouth and returning visitors lower your blended CAC without costing money, which makes paid channels look cheaper than they are. Keep this in mind when you compare periods.
- Different customers. A customer who buys once and a customer who stays for years are not the same, so compare CAC with lifetime value.
Ways to lower your CAC
Improve how well your marketing converts by testing headlines and buttons (A/B testing) and removing friction at the last step (simplifying checkout). Use your happy customers to bring in more: a referral program can win customers more cheaply than advertising. Keeping customers longer does not lower CAC, but it raises the value of every customer you win (see customer retention).
Related tools and reading
Frequently asked questions
What is a good CAC?
There is no number that is good for every business. It depends on what a customer is worth to you. A CAC is healthy when the gross profit a customer brings clearly exceeds it and you earn the money back quickly enough for your cash flow.
Should I include salaries in CAC?
Include the salaries and commissions of people whose job is to win new customers. Leave out staff who only serve existing customers. Whatever you choose, apply it the same way each period.
What is the difference between CAC and cost per lead?
Cost per lead divides spend by the number of enquiries or sign-ups. CAC divides spend by the number of people who became paying customers, so it is always at least as high.
How often should I calculate CAC?
Monthly is a good rhythm for many small businesses, with a longer view each quarter to smooth out timing. Recalculate after any big change in spend.