Customer Acquisition Cost Calculator
Customer acquisition cost (CAC) measures how much your business spends to acquire each new customer. The formula is simple: divide your total marketing and sales expenditure in a given period by the number of new customers acquired in that same period. A lower CAC relative to customer lifetime value signals a profitable growth engine. This calculator accepts total spend and new customer count and returns your CAC per customer, useful for benchmarking campaigns, justifying budget requests, and comparing channels.
Customer acquisition cost formula
CAC = Total Marketing and Sales Spend / Number of New Customers Acquired
Both figures must cover the same time period. Include salaries, ad spend, agency fees, software, and any other cost directly tied to customer acquisition in the numerator.
How to use your CAC
- Compare CAC to customer lifetime value (LTV). An LTV:CAC ratio of 3:1 or higher indicates a sustainable business.
- Track CAC by channel to identify which campaigns are most efficient.
- Monitor CAC month-over-month to spot rising costs before they erode margins.
- Use CAC to set realistic marketing budgets: multiply your new customer target by your target CAC.
- A rising CAC is not always bad if LTV also rises, for example with higher-value enterprise customers.
Customer acquisition cost: frequently asked questions
What is customer acquisition cost (CAC)?
Customer acquisition cost is the total amount spent on marketing and sales divided by the number of new customers acquired in the same period. It tells you exactly how much it costs your business to win each new customer.
What costs should I include in CAC?
Include all marketing spend (ads, content, SEO, social), all sales costs (salaries, commissions, tools, travel), and any overhead directly tied to acquiring customers. Exclude costs for serving or retaining existing customers.
What is a good CAC?
A healthy CAC depends on your customer lifetime value (LTV). As a general benchmark, an LTV to CAC ratio of 3:1 or higher is considered strong. A ratio below 1:1 means you are losing money on each new customer.
How often should I calculate CAC?
Monthly tracking gives you the most actionable data. Seasonal businesses often look at quarterly CAC as well. Always use the same time window for both costs and new customers to keep the metric meaningful.
How do I reduce my CAC?
Common approaches include improving ad targeting to cut wasted spend, increasing conversion rates on your landing pages, investing in referral programs, and focusing on organic (SEO and content) channels that have lower marginal cost over time.
Official sources
- U.S. Small Business Administration: Marketing and Sales Guide.
- U.S. Securities and Exchange Commission (SEC) guidance on marketing cost disclosure: SEC EDGAR.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.