CAC Calculator
Enter Your Acquisition Costs
Fill in your sales and marketing expenses and the number of new customers to calculate your Customer Acquisition Cost, LTV:CAC ratio, and payback period.
How to Use the CAC Calculator
Choose Your Mode and Period
Select Simple for a quick calculation with one total spend figure, Standard to break expenses into marketing and sales line items, or By Channel to analyze CAC per acquisition channel. Set the time period (Monthly, Quarterly, or Annual) and choose your business model to activate the right industry benchmarks.
Enter Your Sales and Marketing Expenses
In Standard or Channel Mode, enter your spending across each expense category: paid ads, content and SEO, social media, influencer fees, affiliate commissions, sales team salaries, sales software, and any other costs. Be comprehensive — including all costs that touch acquisition will give you the most accurate CAC.
Add Advanced Metrics for LTV and Payback
Click 'Advanced Metrics' to unlock LTV, LTV:CAC ratio, and payback period calculations. Enter your average monthly revenue per customer (ARPA), gross margin percentage, and monthly churn rate. These three inputs enable the full unit economics dashboard with coaching tips.
Review Results and Export
Review your CAC hero result, health rating, unit economics dashboard, LTV:CAC ratio ring, payback period chart, expense breakdown donut, and per-channel bar chart. Coaching tips appear automatically when your metrics deviate from benchmarks. Export to CSV for spreadsheet analysis or print for investor or leadership presentations.
Frequently Asked Questions
What is a good Customer Acquisition Cost?
A good CAC is one that is significantly lower than your Customer Lifetime Value (LTV). The specific dollar amount varies widely by industry and business model. For B2B SaaS, an excellent CAC is typically below $150, with the industry average around $205. For e-commerce, excellent CAC is often below $50. Rather than focusing on a single number, compare your CAC against LTV to compute the LTV:CAC ratio — a ratio of 3:1 or higher is the broadly accepted benchmark for most subscription and SaaS businesses. Always benchmark against your specific vertical and business segment.
What costs should I include in CAC?
CAC should include all costs directly attributable to acquiring new customers: paid advertising spend (Google Ads, Meta, LinkedIn, programmatic), content and SEO production costs, social media management, influencer and creator fees, affiliate commissions, sales team salaries and commissions, CRM and sales software subscriptions, agency fees for marketing or sales support, trade show and event costs, and any other expense incurred specifically to attract and convert new buyers. Do not include onboarding costs, customer success, product development, or general overhead — those belong in operating expenses or COGS.
What is the LTV:CAC ratio and why does 3:1 matter?
The LTV:CAC ratio compares the total lifetime revenue (net of COGS) you expect to earn from a customer against what you paid to acquire them. A 3:1 ratio means for every $1 spent on acquisition, you earn $3 back over the customer's lifetime. This benchmark emerged from SaaS industry practice and reflects a balance between growth investment and profitability. Below 1.5:1 indicates you are likely losing money on each customer when you account for all costs. Above 5:1 is strong but may signal underinvestment — the business could profitably spend more to grow faster. Ratios in the 3:1 to 5:1 range are generally the sweet spot for scaling SaaS and subscription companies.
How do I calculate the CAC Payback Period?
The CAC Payback Period is calculated as: CAC divided by (Monthly ARPA multiplied by Gross Margin %). For example, if your CAC is $600, your monthly ARPA is $100, and your gross margin is 70%, the payback period is $600 / ($100 × 0.70) = 8.6 months. This tells you it takes approximately 8.6 months of gross profit from that customer to recover the acquisition cost. For businesses without a gross margin input, the simpler formula is CAC divided by Monthly ARPA. Benchmarks vary by segment: SMB SaaS targets under 12 months, mid-market under 18, enterprise under 24, and e-commerce often under 3 months.
What is the difference between New CAC and Blended CAC?
New CAC focuses exclusively on the cost to acquire brand-new customers — it uses only the portion of sales and marketing spend directed at new customer acquisition and divides it by new customers only. Blended CAC includes all customers, including reactivated or expansion customers, and divides total S&M spend by total customers added. Blended CAC is often lower because expansion revenue from existing customers is less expensive to generate. Investors generally prefer to see New CAC because it most accurately reflects the true cost of growing the customer base. This calculator uses New CAC — enter the number of newly acquired customers, not total customers including expansions.
How can I reduce my Customer Acquisition Cost?
Reducing CAC requires both efficiency improvements and strategic reallocation. Start by analyzing per-channel CAC — most businesses have channels that acquire customers at 2x to 5x the cost of other channels. Shift budget toward efficient channels. Improve conversion rates at every funnel stage: better landing pages, stronger offers, and tighter sales qualification all reduce the cost per converted customer without cutting spend. Invest in organic and referral channels (SEO, content, word-of-mouth) which have near-zero marginal CAC at scale. Improve onboarding to reduce early churn, which improves LTV:CAC even when CAC stays constant. Finally, use this calculator regularly — tracking CAC monthly by channel creates accountability and surfaces issues before they become expensive.