Growing a business costs money, and the single number that tells you whether that growth is healthy is Customer Acquisition Cost (CAC). It answers the blunt question: how much do we spend, on average, to win one new paying customer? This calculator takes your marketing spend, your sales cost, and the number of new customers you gained, then works out your CAC alongside the two metrics investors and operators obsess over — the LTV:CAC ratio and the CAC payback period.
Enter your figures below and every result updates instantly. Use it before you scale a channel, before you approve a budget, or before you ask "is this customer worth it?"
How to Use
- Enter Marketing Spend — every dollar you spent on ads, content, SEO, social, and campaigns during the period you are measuring (typically a month or a quarter).
- Add Sales Cost — the salaries, commissions, CRM tools, and overhead tied directly to closing new customers. If you only have a lean marketing team with no separate sales function, you can leave this at zero.
- Type New Customers — the number of paying customers you actually gained in that same period. Count buyers, not sign-ups or free trials, unless your model converts trials automatically.
- Expand the optional fields to unlock the advanced metrics. Enter Average Order Value, Purchases per Month, Gross Margin, and Customer Lifetime. These feed the lifetime value calculation.
- Read the result card. CAC is the headline number. The LTV:CAC ratio tells you whether a customer is worth what you paid for them, and the Payback Period tells you how many months it takes to earn that acquisition cost back.
The golden rules most SaaS and e-commerce teams follow: a healthy LTV:CAC ratio is at least 3:1, and a payback period under 12 months means your cash flow can absorb growth. A ratio below 1:1 means you are losing money on every new customer.
The CAC Formula
Customer Acquisition Cost is straightforward:
CAC = (Marketing Spend + Sales Cost) / New Customers
For example, if you spent $10,000 on marketing and $5,000 on sales in a month and acquired 250 new customers, your total acquisition cost is $15,000. Divided by 250, that gives a CAC of $60 per customer.
The reason the advanced fields matter is that CAC on its own tells you almost nothing. A $60 CAC is cheap if a customer is worth $720 over their life, and ruinous if they are only worth $50. That is why we extend the calculation:
- Monthly gross profit per customer = Average Order Value × Purchases per Month × (Gross Margin ÷ 100)
- Lifetime Value (LTV) = Monthly gross profit per customer × Customer Lifetime (in months)
- LTV:CAC ratio = LTV ÷ CAC
- Payback period = CAC ÷ Monthly gross profit per customer
Using the same numbers — an $80 average order value, 1.5 purchases a month, a 50% gross margin, and a 12-month lifetime — the monthly gross profit per customer is $60, LTV is $720, the LTV:CAC ratio is 12.0:1, and the payback period is 1.0 month. That is an exceptionally healthy profile.
Why These Benchmarks Matter
The 3:1 rule comes from the need to cover all the other costs of running a business — product development, support, hosting, and profit — on top of the money you spent to acquire the customer. If your ratio is 5:1 or higher, you likely have room to spend more on growth. If it sits near 1:1, you are barely breaking even and any downturn in retention or conversion can push you into losses. If it exceeds 10:1, you are probably under-spending on acquisition and leaving market share on the table.
The payback period matters because acquisition spend happens now, while revenue arrives later. A long payback means you need working capital to fund growth. Consumer subscription businesses often target under 3 months; B2B software may accept 12 to 18 months because enterprise contracts are far larger.
Examples
Example 1 — A healthy direct-to-consumer brand. Over one month a store spends $10,000 on ads and $5,000 on sales overhead, gaining 250 customers. The average order value is $80, customers buy 1.5 times a month, gross margin is 50%, and they stay 12 months. CAC lands at $60, LTV at $720, the ratio at 12.0:1, and payback in 1.0 month. This brand can confidently scale its ad budget.
Example 2 — A lean team with no separate sales cost. A small business spends $8,000 on marketing only ($0 sales cost) and lands 200 customers. With a $60 order value, one purchase a month, 45% margin, and a 10-month lifetime, CAC is $40, LTV is $270, the ratio is 6.75:1, and payback is about 1.48 months. Even without a sales team, the unit economics are strong.
Example 3 — A high-growth enterprise campaign. A SaaS company runs a $1,500,000 marketing quarter plus $500,000 in sales cost to win 10,000 customers at scale. With a $120 order value, 2 purchases a month, 40% margin, and an 18-month lifetime, CAC is $200, LTV is $1,728, the ratio is 8.64:1, and payback is roughly 2.08 months. Large acquisition budgets are sustainable when the ratio stays this high.
FAQ
What is a good customer acquisition cost?
There is no universal number — it depends entirely on what a customer is worth. A $200 CAC is excellent for a customer worth $1,728 (an 8.6:1 ratio) and terrible for one worth $150. Always judge CAC against lifetime value. The widely accepted target is an LTV:CAC ratio of at least 3:1.
How do I calculate CAC from marketing and sales spend?
Add your total marketing spend and sales cost over a defined period, then divide that sum by the number of paying new customers you gained in the same period. For example, ($10,000 + $5,000) / 250 customers = $60 CAC. Keep the time window consistent — never mix a month of spend with a quarter of customers.
What is a healthy LTV:CAC ratio?
A ratio of 3:1 or higher is generally considered healthy. Below 1:1 you are losing money on every customer; between 1:1 and 3:1 you may be overspending or need better retention; above 5:1 you likely have room to invest more in growth; and a ratio above 10:1 often signals you are under-investing and leaving market share to competitors.
How long should the CAC payback period be?
Consumer and subscription businesses usually aim to earn back their acquisition cost within 3 months. B2B and enterprise software commonly accept 12 to 18 months because contracts are large and sales cycles are long. The faster the payback, the less working capital you need to fund growth.
Should free trials and sign-ups count as new customers?
No. Count only people who actually pay you, because CAC measures the cost of acquiring revenue. If your model is a free trial that reliably converts, either count converted trial customers (not trials) or model the trial-to-paid conversion separately. Counting free sign-ups as customers will artificially lower your CAC and mislead your decisions.
What is the difference between CAC and blended CAC?
Blended CAC divides total spend by all new customers, regardless of channel or source. Channel CAC divides the spend of one channel (e.g., Facebook ads) by the customers that channel produced. Blended CAC is useful for a headline view; channel CAC tells you which channels are efficient and deserve more budget.
Disclaimer
This customer acquisition cost calculator is provided for informational purposes only and does not constitute financial, investment, or accounting advice. The figures and benchmark ratios above are estimates based on the inputs you enter and the standard CAC, LTV, and payback formulas; actual business results vary by industry, model, pricing, retention, and period. Always validate your unit economics with your own historical data and a qualified finance or accounting professional before making budget decisions.