CAC Calculator

What Is the CAC Calculator?

Customer Acquisition Cost (CAC) is the average amount spent to acquire one new customer -- a core SaaS/business growth metric, usually paired with LTV to judge whether growth spending is sustainable.

How to Use This Tool

Enter total sales & marketing spend and the number of new customers acquired in the same period. CAC appears instantly.

The Formula

A Worked Example

With the default inputs, sales and marketing spend is 10,000 and new customers are 100, so CAC is 100 per customer. Consider a hypothetical subscription app for one quarter: 18,000 on advertising, 9,000 on the sales and marketing team's pay, 2,000 on marketing software and 1,000 on a freelance designer, for a total of 30,000. It gains 240 new paying customers. CAC is 30,000 divided by 240, which is 125. If it had counted only the 18,000 of advertising, it would have reported 75, which flatters the result by a third.

What to Include in Spend

The input label says sales and marketing spend, and the completeness of that total is the biggest factor in whether your CAC is trustworthy. Consider including:

• Paid advertising across all channels, and agency or freelancer fees.
• Salaries, commissions and benefits for people in marketing and sales roles.
• Tools and software used for marketing and sales, such as email platforms and customer relationship management systems.
• Content production, events, sponsorships and promotional discounts if you treat them as acquisition costs.

Whichever set of costs you choose, apply the same definition every period so trends stay comparable. A fully loaded figure is the more conservative and honest one, while an ad-spend-only figure is useful for judging individual channels.

Matching Spend to Customers

• Use the same time window. Spend and new customers should come from the same period. If your sales cycle is long, spend in one quarter may produce customers in the next, so a lagged comparison or a longer window gives a more realistic figure.
• Count only new customers. Returning customers or renewals do not belong in the denominator, because the spend was not what won them.
• Define a customer consistently. A paying customer, a free trial user and a lead are very different things. Use one definition.
• Watch for organic customers. Word of mouth and search visitors will be counted in the customer total, which lowers the blended CAC. Some teams also compute a paid-only CAC by using only paid spend and paid-attributed customers.

Interpreting the Number

CAC alone is neither good nor bad. It has meaning only when compared with what a customer brings in over their relationship with you. If a customer is worth 400 in gross profit over their lifetime, a CAC of 125 leaves room, while a CAC of 500 does not. Pair the result with the LTV:CAC Ratio Calculator, and consider how long it takes for a customer's gross profit to repay the CAC, which affects cash flow. Fast-growing businesses can hold cash for a while by financing CAC, but slow payback puts pressure on cash.

Limits and Edge Cases

• The number of new customers must be at least 1. With zero customers the tool shows a message rather than dividing by zero.
• Spend can be zero, which gives a CAC of zero, as could happen with purely organic growth. That is arithmetically valid but not a reason to conclude that growth is free, since time and content effort have a cost.
• The calculator gives an average. Individual channels usually differ, so run the numbers separately per channel when you have the data.
• Customer counts are not limited to whole numbers by the calculation, but you should enter whole customers.
• Results are displayed in dollar format with two decimals; other currencies work if you keep the units consistent.

Use the output for planning and channel comparison. For investor reporting or audited metrics, agree the exact CAC definition with your finance lead or accountant beforehand.

Frequently Asked Questions