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Customer Acquisition Cost Calculator – CAC Calculator | AskSMB
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marketing

Customer Acquisition Cost Calculator

Calculate CAC and measure your marketing efficiency and customer acquisition costs

$

Ads, tools, agency, promotions

$

Sales salaries, commissions, tools

Number of new paying customers

Customer Acquisition Cost (CAC)

$0.00

Average cost per new customer

Customers per $1,000 Spent

Infinity

How many customers you gain per $1,000

Total Acquisition Spend

$0

Marketing + sales spend

Efficiency Indicator

🟢 Efficient - Low acquisition cost

Based on industry benchmarks

Acquisition Spend Breakdown

How the Customer Acquisition Cost Calculator Works

What is customer acquisition cost?

Customer Acquisition Cost (CAC) is the total cost your business spends to acquire a new customer. It includes all marketing and sales expenses—advertising, salaries, software, agencies, and more—divided by the number of new customers gained. CAC is one of the most important metrics for evaluating business efficiency and sustainability. A low CAC means you're acquiring customers cost-effectively, while a high CAC can signal inefficient marketing or unsustainable growth.

Why CAC matters for growth

Understanding your CAC is critical for sustainable growth:

  • Profitability: If CAC is too high relative to customer lifetime value, you lose money on every customer
  • Investor appeal: Investors look for a healthy LTV:CAC ratio (typically 3:1 or higher)
  • Budget allocation: Knowing CAC by channel helps you invest in the most efficient acquisition sources
  • Scaling decisions: Low CAC indicates you can scale marketing spend profitably
  • Payback period: CAC determines how long it takes to recover acquisition costs

CAC vs lifetime value (LTV)

CAC must always be evaluated against customer lifetime value (LTV):

  • 3:1 ratio is ideal: LTV should be at least 3× your CAC for healthy unit economics
  • Below 3:1: You're spending too much to acquire customers or not monetizing them enough
  • Above 5:1: You might be under-investing in growth; consider increasing marketing spend
  • Payback period: Aim to recover CAC within 12 months for healthy cash flow
  • SaaS benchmark: Most successful SaaS companies maintain LTV:CAC of 3:1 to 5:1

Marketing vs sales cost breakdown

CAC includes both marketing and sales expenses:

  • Marketing costs: Paid ads, content creation, SEO tools, email software, agencies, events, creative production
  • Sales costs: Sales team salaries, commissions, CRM software, sales enablement tools, training
  • Fully-loaded costs: Include salaries, benefits, taxes, and overhead—not just base pay
  • Time period alignment: Match costs and customers to the same time period (e.g., monthly, quarterly)
  • Attribution: For blended CAC, include all costs; for channel-specific CAC, attribute only relevant expenses

How to reduce CAC

Strategies to lower your customer acquisition cost:

  • Improve conversion rates: Optimize landing pages, simplify checkout, reduce friction in your funnel
  • Focus on organic channels: Invest in SEO, content marketing, and community building for lower long-term CAC
  • Build referral programs: Referrals typically have the lowest CAC and highest retention
  • Retarget warm leads: Nurture prospects who showed interest but didn't convert
  • Optimize ad targeting: Better audience targeting reduces wasted ad spend
  • Automate marketing: Use email automation, chatbots, and workflows to reduce manual effort
  • Improve product-market fit: Better fit means easier sales and lower acquisition costs
  • Increase pricing: Higher prices improve LTV:CAC ratio without reducing CAC

Example Scenario

Scenario: A SaaS company wants to evaluate its customer acquisition efficiency for the quarter.

Marketing spend: $6,000

Sales spend: $4,000

New customers: 50

Results:

• Total spend: $10,000 ($6,000 + $4,000)

• CAC: $200 ($10,000 ÷ 50)

• Customers per $1,000: 5 (50 ÷ 10)

• Efficiency: 🟡 Moderate - Average cost per customer

With a CAC of $200, this company should ensure their customer LTV is at least $600 (3:1 ratio) for sustainable growth. They could improve efficiency by focusing on higher-converting channels or optimizing their sales funnel.

Frequently Asked Questions

A good CAC depends on your industry and customer lifetime value (LTV). Generally, CAC should be less than one-third of LTV (3:1 ratio). For SaaS, CAC under $200 is often considered good. E-commerce typically targets $50-$150. The key is ensuring you can recover CAC within 12 months and maintain a healthy LTV:CAC ratio.

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💡 Quick Tips

  • •All calculations happen in your browser - your data is private
  • •Results update in real-time as you type
  • •Export to PDF or share via link
  • •No sign-up required

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