CAC Calculator
Calculate your Customer Acquisition Cost to understand how much you spend to win each new customer. Break down costs by marketing and sales channels.
Total marketing budget for the period
Total sales team costs for the period
Customers acquired in the period
Duration of the spend
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Understanding Customer Acquisition Cost
Customer Acquisition Cost is one of the most important metrics for any growth-stage business. It tells you exactly how much you spend to bring in each new customer and directly impacts your unit economics and profitability timeline.
The CAC Formula
CAC = Total Acquisition Costs / New Customers. Total acquisition costs should include all marketing expenses (ads, content, events, tools) and all sales expenses (salaries, commissions, tools, travel). Be honest about what to include — underestimating CAC is one of the most common mistakes in startup finance.
CAC by Channel
Breaking CAC down by channel reveals which acquisition methods are most efficient. Organic channels (SEO, referrals, content) typically have lower marginal CAC but require upfront investment. Paid channels (ads, sponsorships) scale faster but have higher marginal costs. The best growth strategies blend both.
CAC and Fundraising
Investors scrutinize CAC closely. They want to see that your CAC is declining over time (efficiency improving), that your LTV:CAC ratio is healthy (3x+), and that you have a clear path to reducing CAC through organic growth and brand equity. A high and rising CAC is a red flag for scalability.
Frequently Asked Questions
- What is Customer Acquisition Cost (CAC)?
- Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer. It includes all marketing and sales expenses divided by the number of new customers gained during the same period. For example, if you spent $10,000 on marketing and sales in a month and acquired 50 customers, your CAC is $200.
- How do you calculate CAC?
- CAC = (Total Marketing Spend + Total Sales Spend) / Number of New Customers Acquired. Include all costs: ad spend, content creation, sales team salaries and commissions, tools, and overhead allocated to acquisition activities. Use consistent time periods for spend and customer counts.
- What is a good CAC?
- A good CAC depends on your industry and business model. The key benchmark is your LTV:CAC ratio — ideally 3:1 or higher, meaning each customer generates 3x or more revenue than they cost to acquire. SaaS companies typically target CAC payback within 12-18 months. E-commerce often aims for CAC below first-order profit.
- What is the difference between blended CAC and paid CAC?
- Blended CAC includes all customers (organic + paid channels) in the denominator. Paid CAC only counts customers from paid channels and only includes paid acquisition costs. Blended CAC is usually lower because it benefits from organic and word-of-mouth customers. Investors often want to see both numbers.
- How can I reduce my CAC?
- You can reduce CAC by: (1) improving conversion rates at each funnel stage, (2) investing in organic channels (SEO, content, referrals) that have lower marginal costs, (3) better targeting to reduce wasted ad spend, (4) improving your product to increase word-of-mouth, and (5) optimizing your sales process to close more deals with less effort.