Customer Acquisition Cost (CAC) Calculator
Example: Total sales and marketing spend (period): 20000 $ · New customers acquired: 100 customers
| Customer acquisition cost | $200 |
| Cost per acquired customer | $200 |
Worked example
If you spent $20,000 on sales and marketing in a quarter and gained 100 new customers, your CAC is $20,000 divided by 100, or $200 per customer. On its own that number means little; it becomes powerful when you compare it to the lifetime value of a customer. If each customer is worth $800 over their lifetime, a $200 CAC is healthy; if they are worth $250, you are barely ahead.
Frequently asked questions
What spend should I include?
Everything that goes into winning customers: ad spend, marketing salaries and tools, sales commissions and salaries, and agency fees. Leaving costs out understates CAC and flatters your channels.
Over what period should I measure?
Match the spend and the customers to the same window, usually a month or quarter. Be mindful of lag: dollars spent this month may win customers next month, which can distort a single short period.
What is a good CAC?
There is no universal number; CAC only makes sense relative to lifetime value. The common rule of thumb is that a customer should be worth at least three times what it cost to acquire them.
How is CAC different from cost per lead?
Cost per lead measures spend per prospect; CAC measures spend per paying customer. Because only some leads convert, CAC is always higher than cost per lead and is the number that actually affects profit.