What is CAC?
CAC, or customer acquisition cost, is the average amount you spend to win one new customer. To find it, divide your total sales and marketing costs for a period by the number of new customers you gained in that period.
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How to calculate CAC
Divide your sales and marketing costs by the number of new customers they brought in.
Why CAC matters
CAC shows whether your growth is affordable. If each customer costs more to win than they bring in, growing faster only makes the loss bigger.
It's most useful next to customer lifetime value. Together they show whether your acquisition spending pays back over time.
What to include in the cost
Fully loaded CAC includes ad spend, salaries, tools, agency fees, and other costs of marketing and sales. A narrower version counts only paid media, which is sometimes called paid CAC.
Both are useful, but they answer different questions. Name the version you're using, and keep it the same when you compare periods.
Ways to lower CAC
Improving conversion rates, tightening targeting, and shifting spend to channels that bring in customers more efficiently can all help. Higher retention and referrals also bring in customers at a lower cost.
Disclaimer
This calculator is for informational purposes only, and we don't guarantee the accuracy of its results. You're responsible for verifying any results before relying on them. See our terms of use.
Common questions
How do you calculate CAC?
Divide total sales and marketing costs by the number of new customers. For example, $50,000 spent to win 250 customers gives a CAC of $200.
What is a good CAC?
It depends on what a customer is worth to you. A CAC is healthy when customers return enough profit over time, which is why CAC is compared with lifetime value and payback period.
What is the difference between CAC and CPA?
CPA is the cost of any conversion you define, such as a lead or a sale. CAC specifically measures the cost of winning a paying customer, and it often includes more costs than ad spend.
Should CAC include existing customers?
No. CAC counts only new customers. Repeat purchases by existing customers belong in retention and lifetime value instead.
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