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Customer Acquisition Cost (CAC) Calculator
Calculate how much you spend to acquire each customer. Get instant insights with industry benchmarks.
Calculate Your CAC
Include: ads, content, tools, software, agencies
Include: salaries, commissions, sales tools, training
Total new customers in the measurement period
Your CAC
Cost Per Customer
$0.00
Key Insight
Your CAC should be recovered within 12 months and be at least 3x lower than your CLV for sustainable growth.
Related Calculators
What is Customer Acquisition Cost (CAC)?
Customer Acquisition Cost (CAC) is the total cost your business incurs to acquire a new customer. It's one of the most critical metrics for understanding the efficiency of your marketing and sales efforts.
Why CAC Matters for Your Business
Understanding your CAC is essential for several reasons:
- Profitability: If your CAC exceeds your customer lifetime value (CLV), you're losing money on every customer.
- Fundraising: Investors scrutinize CAC as a key indicator of business health and scalability.
- Channel Optimization: Knowing CAC by channel helps you allocate budget to the most efficient acquisition sources.
- Growth Planning: CAC determines how much you can afford to spend on growth while remaining profitable.
How to Calculate CAC
The formula for calculating CAC is straightforward:
CAC = (Total Marketing Costs + Total Sales Costs) / Number of New Customers
What to Include in Your CAC Calculation
Marketing Costs:
- Advertising spend (Google Ads, Facebook, LinkedIn, etc.)
- Content creation and marketing
- Marketing software and tools
- Agency and contractor fees
- Marketing team salaries
Sales Costs:
- Sales team salaries and commissions
- Sales tools and CRM software
- Sales training and development
- Travel and entertainment expenses
CAC Benchmarks by Industry
| Industry | Average CAC | Notes |
|---|---|---|
| SaaS (B2B) | $205 - $1,450 | Varies by ACV |
| E-commerce | $45 - $200 | Lower for repeat purchases |
| Mobile Apps | $1 - $5 | Freemium model |
| Financial Services | $175 - $300 | High compliance costs |
The CAC:CLV Ratio
CAC alone doesn't tell the full story. You need to compare it to Customer Lifetime Value (CLV). The ideal ratio is:
- 3:1 or higher - Healthy and scalable
- 2:1 to 3:1 - Acceptable but tight margins
- Below 2:1 - Unsustainable, needs immediate attention
How to Reduce Your CAC
- Improve conversion rates: Better landing pages and sales processes reduce CAC without cutting spend.
- Focus on high-performing channels: Double down on channels with the lowest CAC.
- Implement referral programs: Word-of-mouth has the lowest CAC of any channel.
- Optimize your sales funnel: Remove friction points that cause drop-offs.
- Invest in content marketing: Long-term SEO and content have lower CAC than paid ads.
Common CAC Mistakes to Avoid
- Not including all costs: Many founders forget to include salaries, tools, and overhead.
- Using the wrong time period: Match your CAC calculation period to your sales cycle.
- Ignoring channel-specific CAC: Blended CAC hides which channels are inefficient.
- Forgetting about payback period: Even good CAC can kill cash flow if payback takes too long.