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Customer Acquisition Cost (CAC) Calculator
Work out what it costs to win a customer — plus your LTV, LTV:CAC ratio, and payback period — in seconds. Free, private, no sign-up.
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LTV:CAC ratio
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Customer Acquisition Cost
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Lifetime Value (LTV)
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LTV : CAC ratio
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CAC payback
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What is customer acquisition cost (CAC)?
Customer acquisition cost (CAC) is the average amount you spend to win one new customer. It bundles all your sales and marketing costs over a period and divides by the number of customers acquired in that same period. It's one of the most important metrics for any business that spends money to grow.
The CAC formula
- CAC = (Marketing spend + Sales spend) ÷ New customers acquired
- LTV = Avg. monthly revenue × Gross margin % × Avg. customer lifespan (months)
- LTV : CAC ratio = LTV ÷ CAC
- CAC payback (months) = CAC ÷ (Monthly revenue × Gross margin %)
Use the same time window for spend and customers (e.g. one month or one quarter) so the numbers line up.
What's a good LTV:CAC ratio?
- Below 1:1 — you're losing money on every customer. Fix this first.
- 1:1 – 3:1 — workable but tight; improve retention, margin, or acquisition efficiency.
- 3:1 — the widely cited healthy benchmark for SaaS and subscription businesses.
- 5:1+ — very efficient, but it can mean you're under-investing in growth and leaving market share on the table.
For payback, most healthy startups aim to recover CAC within 12 months (under 6 is excellent).
How to reduce your CAC
- Improve conversion rate — better landing pages and offers mean more customers from the same spend.
- Lean into organic & referral channels that don't cost per click.
- Automate sales follow-up so reps spend time only on qualified leads — one of the fastest ways to cut acquisition cost.
- Raise LTV — better onboarding and retention make any CAC more affordable.
Frequently asked questions
What costs should I include in CAC?
All sales and marketing costs for the period: ad spend, salaries and commissions for sales/marketing staff, software, agencies, and content. Be consistent period to period.
What period should I use?
Pick a window where spend and the customers it generated roughly line up — usually a month or quarter. Avoid mixing this month's spend with last year's customers.
Do I need the LTV fields?
No — CAC alone works. But adding average revenue, margin, and lifespan unlocks the LTV:CAC ratio and payback period, which tell you whether your acquisition is actually profitable.
Is this private and free?
Yes. It's free with no sign-up, and the math runs entirely in your browser — your numbers never leave your device unless you choose to email yourself the report.
