Customer Acquisition Cost (CAC) Calculator
Customer acquisition cost: total marketing spend divided by customers won, plus an optional LTV:CAC ratio and a spend split by channel. How it works
Use the Customer Acquisition Cost (CAC) Calculator
About the Customer Acquisition Cost (CAC) Calculator
Customer acquisition cost is marketing spend divided by new customers: $8,000 spent to win 200 customers is a CAC of $40.00. Enter a customer lifetime value of $120 and the LTV:CAC ratio is 3.00 : 1, which the tool labels Healthy; below 1 it says At Risk.
CAC by marketing spend and customers acquired
| Marketing spend | 50 customers | 100 customers | 250 customers | 500 customers |
|---|---|---|---|---|
| $1,000.00 | $20.00 | $10.00 | $4.00 | $2.00 |
| $5,000.00 | $100.00 | $50.00 | $20.00 | $10.00 |
| $10,000.00 | $200.00 | $100.00 | $40.00 | $20.00 |
| $50,000.00 | $1,000.00 | $500.00 | $200.00 | $100.00 |
CAC = spend ÷ customers for one period, as the tool computes it.
The LTV:CAC label at a CAC of $40.00
| Customer lifetime value | LTV:CAC ratio | Label |
|---|---|---|
| $20.00 | 0.50 : 1 | At Risk |
| $40.00 | 1.00 : 1 | Caution |
| $80.00 | 2.00 : 1 | Caution |
| $120.00 | 3.00 : 1 | Healthy |
| $200.00 | 5.00 : 1 | Healthy |
The tool labels 3 or more Healthy, 1 up to 3 Caution and under 1 At Risk.
Channel breakdown for $8,000 and 200 customers
| Channel | Spend | Share of total | Spend per customer |
|---|---|---|---|
| Paid Ads | $5,000.00 | 62.5% | $25.00 |
| Content / SEO | $2,000.00 | 25.0% | $10.00 |
| Events | $1,000.00 | 12.5% | $5.00 |
| Total | $8,000.00 | 100.0% | $40.00 |
Spend per customer is each channel’s spend divided by all 200 customers, so the rows add up to the total CAC. It is a share of the CAC, not the cost of a customer won by that channel.
How to use this tool
- Enter the customers acquired and the total marketing spend for the same period.
- Optional: enter a customer lifetime value (LTV) to see the LTV:CAC ratio and its label. A quick LTV is gross profit per customer per month times the months a customer stays.
- Optional: open "+ Break down spend by channel" and enter Paid Ads, Content / SEO, Events, Affiliate and Other. The total spend becomes their sum.
Frequently asked questions
- How do you calculate customer acquisition cost?
- Divide the marketing spend of a period by the customers you gained in that period. $10,000 spent to gain 250 customers is $40.00 a customer. Use the same period and the same definition of spend every time, or the numbers cannot be compared.
- What is a good LTV:CAC ratio?
- The tool labels a ratio of 3 or more Healthy, 1 up to 3 Caution and under 1 At Risk. The 3 : 1 line is a common rule of thumb, not a standard. A ratio of 1.00 : 1 means a customer brings back exactly what they cost. Whether 3 is enough depends on what you count as lifetime value (revenue or gross profit) and how long customers take to pay back.
- How do I calculate customer lifetime value for the ratio?
- A quick estimate is the gross profit one customer brings in a month times the number of months a typical customer stays. $10 a month for 12 months is an LTV of $120, which against a $40.00 CAC is 3.00 : 1. Dividing the CAC by the monthly gross profit gives the payback time: $40 ÷ $10 = 4 months. The tool does not compute either figure; type the LTV into the optional field.
- What counts as marketing spend?
- The tool divides whatever total you enter. Ad spend alone gives a lower CAC than ad spend plus marketing salaries, software and agency fees. Pick one rule and keep it, so a change in CAC comes from your results and not from a change in what you counted.
- What does the channel breakdown show?
- Each channel’s share of the total spend and its spend per customer, which is that channel’s spend divided by all customers. The tool does not know which customers each channel won, so the per-customer figures add up to the total CAC ($25.00 + $10.00 + $5.00 = $40.00 in the table) and show where the money went, not what a customer from that channel cost.
- What happens if spend or customers is zero?
- Spend of 0 with 100 customers is a real CAC of $0.00, and the LTV:CAC ratio is then not defined. Zero customers leaves CAC undefined, and a blank field is not counted as 0: the tool asks for the missing number. Negative and non-numeric entries get a message next to the field.
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