Free tool
CAC calculator: what does a new customer cost?
Enter what you spent on marketing, sales and tools in a period, and how many customers you won. Add revenue and margin to see your payback time.
The short answer
Customer acquisition cost (CAC) is everything you spent on sales and marketing in a period, divided by the customers you won in that period. So $7,500 spent to win 12 customers is a CAC of $625. Include pay and tools as well as ad spend, or the number will look better than it is.
Getting a number you can trust
- Include people's time. A founder doing sales isn't free. Add a fair cost for those hours, even if you don't pay it as a salary.
- Match the time period. If your sales take two months to close, compare spend with customers won a bit later.
- Split by channel when you can. A blended CAC can hide one great channel and one terrible one.
- Look at payback too. Earning CAC back within about 12 months is a common target for small SaaS companies. Check lifetime value with our LTV calculator.
Questions
How do you calculate CAC?
Total sales and marketing spend in a period ÷ the number of new customers won in that period.
What should be included in CAC?
Ad spend, sales and marketing pay, tools, agencies and contractors. Leave out costs of serving existing customers.
What is a good CAC?
It depends on what a customer is worth. Judge it against lifetime value: an LTV to CAC ratio of about 3 to 1 is a common rule of thumb.
What is CAC payback?
The months it takes a customer's gross profit to cover what you spent winning them. It's CAC ÷ (monthly revenue × gross margin).
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