Calculate the cost of gaining a new customer to measure marketing ROI
Total Sales & Marketing Spend
Results
Average CAC
$0
What is CAC?
Customer Acquisition Cost (CAC) is the total expense involved in convincing a potential customer to buy a product or service. This includes all costs associated with marketing and sales (advertising, salaries of sales teams, software tools). By comparing CAC with Customer Lifetime Value (LTV), you can determine if your business model is sustainable in the long run.
- The Gold Standard: In most industries, your LTV should be at least 3x your CAC ($LTV:CAC = 3:1$). If your CAC is higher than your LTV, you are losing money on every customer you acquire.
- Payback Period: This is how many months it takes for a customer to pay back the cost it took to acquire them.
- Channel Efficiency: Calculate CAC for different platforms (Facebook vs. Google) to see where your money is working hardest.
How can I lower my CAC? +
You can lower CAC by improving your website's conversion rate, focusing on organic (free) marketing like SEO, or implementing a referral program where existing customers bring in new ones for free.
Should I include my own salary in CAC? +
If you spend a significant portion of your time on sales or marketing, yes. To get a true "Fully Loaded" CAC, you should include all human capital costs involved in the acquisition process.
What is a "Blended CAC"? +
Blended CAC is the total marketing spend divided by *all* new customers (including those who found you organically). Paid CAC only looks at customers acquired directly from paid ads.
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