CAC Calculator
CheckedThis CAC calculator divides what you spend on sales and marketing by the customers it brings in, then tells you how many months each one takes to pay back. Free, no sign-up, and the result updates as you type.
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Most CAC figures are too low because the numerator is too small. Ad spend is easy to pull from a dashboard; the agency retainer, the creative freelancer, the email platform and the salary of whoever runs it all are not, so they quietly go missing and CAC comes out at half the real number. Divide everything you spent to win customers by the customers you actually won, then check the payback period — a 5x LTV ratio is no comfort if it takes fourteen months to get the cash back.
How it's calculated
CAC = (sales spend + marketing spend) ÷ new customers Payback months = CAC ÷ monthly gross profit per customer
LaTeX source
\text{CAC} = \frac{S + M}{N} \qquad \text{Payback} = \frac{\text{CAC}}{\text{ARPU} \times \frac{m}{100}} Worked examples
A DTC brand's quarter, all costs included
$86.00 CAC, 5.0x LTV:CAC, 4.8 month payback
$21,500 of combined spend over 250 first-time buyers is $86 each. Against a $430 gross-profit LTV that is a 5:1 ratio, comfortably above the 3:1 benchmark. Each customer throws off $18 of gross profit a month, so the $86 is back in the bank in 4.8 months.
The numbers used
- Marketing spend
- 18000
- Sales spend
- 3500
- New customers won
- 250
- Customer LTV
- 430
- Revenue per customer per month
- 40
- Gross margin
- 45
Paid social only, no sales team
$150.00 CAC, 2.0x LTV:CAC, 5.0 month payback
$9,000 for 60 customers is $150 each, and a $300 LTV gives only a 2:1 ratio. That is below the level where overheads get covered, so either the creative has to work harder or the LTV has to rise. The five-month payback is fine; the ratio is the problem.
The numbers used
- Marketing spend
- 9000
- Sales spend
- 0
- New customers won
- 60
- Customer LTV
- 300
- Revenue per customer per month
- 50
- Gross margin
- 60
Questions sellers ask
How do you calculate CAC?
Add every cost of winning customers in a period, then divide by the new customers won in that period. That means ad spend, agency and freelancer fees, marketing software, affiliate commission and the salaries of sales and marketing staff. $21,500 over 250 new customers is $86. Repeat purchases from existing customers never go in the denominator.
How do you calculate customer acquisition cost?
Total sales and marketing cost divided by new customers acquired. The judgement call is the time window: spend in March often wins customers in April, so a single month can be misleading for anything with a considered purchase. Use a quarter for slower cycles, and keep paid and organic separate if you want a CAC you can act on.
What is a good CAC rate?
CAC is only good or bad relative to lifetime value, so judge it by the ratio rather than the dollar figure. Roughly 3:1 gross-profit LTV to CAC is healthy, and a payback period under twelve months keeps cash flow workable. A $200 CAC is excellent for a $2,000 LTV and fatal for a $250 one.
What is a good cost per customer acquisition?
Work backwards from margin instead of looking for a benchmark. If a customer generates $430 of gross profit over their life and you want a 3:1 ratio, your ceiling is about $143. Then check the payback: if it takes more than a year to recover, growth is funded by working capital you may not have, and a lower CAC matters more than a higher ratio.
What is a good CLV to CAC ratio?
Three to one, measured on gross profit rather than revenue. Below that, fixed costs eat what acquisition leaves behind. Well above it usually signals underinvestment in growth — a 6:1 ratio often means there are profitable customers you are choosing not to buy. Whatever the target, apply it consistently: a revenue-based 3:1 at a 40% margin is really 1.2:1.
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