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CAC Calculator
Customer acquisition cost is everything you spent on sales and marketing divided by the customers it brought in. Enter both kinds of spend and the number of new customers, then add monthly revenue per customer to see how many months it takes to earn the cost back.
- Total sales and marketing spend
- $30,000.00
- CAC payback period
- 5 months
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Formula
How to use it
- Enter marketing spend for the period.
- Enter sales spend for the same period.
- Enter the number of new customers won in that period.
- Optionally enter monthly revenue per customer and gross margin to get the payback period.
Worked examples
$20,000 of marketing and $10,000 of sales cost that won 150 customers paying $50 a month at an 80% margin
- Total sales and marketing spend
- $30,000.00
- Customer acquisition cost
- $200.00
- CAC payback period
- 5 months
$4,500 of marketing and $1,500 of sales cost for 80 customers paying $25 a month at a 50% margin
- Customer acquisition cost
- $75.00
- CAC payback period
- 6 months
What to include
A fully loaded CAC counts every cost of winning customers: ad spend, agency and freelancer fees, marketing and sales salaries, commission, and the tools those teams use. Counting only ad spend gives a flattering number that hides most of the cost.
Count new customers only. Renewals and repeat orders from existing customers belong in retention, not acquisition.
Payback period and timing
Payback is how long a customer takes to return what you spent to win them, measured in gross profit rather than revenue. For subscription businesses, under 12 months is the usual benchmark; the longer it runs, the more cash growth consumes.
If your sales cycle is long, this month’s customers were won by earlier months’ spending. Compare spend with the customers it actually produced — for example last quarter’s spend against this quarter’s new customers.
Questions people ask
How do you calculate CAC?
Add up sales and marketing costs for a period and divide by the new customers gained in it. $10,000 of spend for 50 new customers is a CAC of $200.
What is a good CAC?
One that is well below what a customer is worth. The usual guide is a customer lifetime value of about three times CAC, and a payback period under a year.
What is the difference between CAC and CPA?
CPA (cost per acquisition) usually means the cost of one conversion in a single campaign, which may be a lead or sign-up rather than a paying customer. CAC is the total cost of winning a paying customer across all sales and marketing.