Customer Acquisition Cost (CAC)
Calculate how much you spend to acquire a single new customer
Your Average CAC
$0.00
Cost per new acquisition
Total Marketing Investment: $0
How to use the CAC Calculator
Customer Acquisition Cost (CAC) is a fundamental metric for startups and e-commerce stores. It measures the total cost of sales and marketing efforts required to acquire a new customer over a specific period. To use this tool, sum up your **Advertising Spend**, **Team Salaries**, and **Software/Tech costs**. Divide this total by the number of **New Customers** you gained in that same timeframe. A sustainable business model typically aims for a CAC that is significantly lower than the Customer Lifetime Value (LTV)—the total revenue a customer brings in before they stop buying from you.
- Marketing Efficiency: A rising CAC suggests that your ads are becoming less effective or the market is getting crowded.
- Scaling Decisions: Knowing your CAC helps you decide how much you can afford to spend on ads to hit your growth targets.
- Benchmarking: Compare your CAC across different channels (e.g., SEO vs. Paid Ads) to see where your money works hardest.
Why should I include salaries in CAC? +
True CAC includes everything spent to get a customer. If you have a salesperson or a marketing manager, their time is a cost. Excluding salaries gives you a "Blended CAC," which might make the business look more profitable than it actually is.
What is the LTV to CAC ratio? +
The LTV:CAC ratio compares the value of a customer to the cost of getting them. A healthy ratio for a growing business is 3:1—meaning the customer is worth three times what it cost to acquire them.
How can I reduce my CAC? +
You can reduce CAC by improving your website's conversion rate (CRO), focusing on organic channels like SEO/Content Marketing, or targeting your ads more precisely to a high-intent audience.
Does CAC include existing customers? +
No. CAC only focuses on *new* customers. The cost of keeping existing customers is called "Retention Cost" or "Customer Success Cost."
Is a high CAC always bad? +
Not necessarily. If you sell high-ticket items (like luxury cars or enterprise software), a high CAC is expected because the profit from a single sale is large enough to cover the expense.
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