Customer Acquisition Cost Calculator
Calculate Customer Acquisition Cost (CAC = marketing spend / new customers) and LTV:CAC ratio.
A healthy SaaS LTV:CAC ratio is 3:1 or higher.
Customer Acquisition Cost (CAC) is the total cost your business spends, on average, to acquire one new paying customer. It is one of the most critical metrics in business because it directly determines whether your revenue model is sustainable.
Formula: CAC = Total Sales and Marketing Spend ÷ Number of New Customers Acquired
What to include in “Total Sales and Marketing Spend”:
- Advertising costs (Google Ads, Facebook Ads, print, radio)
- Sales team salaries and commissions
- Marketing team salaries
- Marketing software and tools (CRM, email platforms, analytics)
- Agency fees and contractor costs
- Event and sponsorship costs
- Content creation and SEO investment
Related formulas: CAC Payback Period = CAC ÷ Monthly Gross Profit per Customer LTV:CAC Ratio = Customer Lifetime Value ÷ CAC
Healthy benchmarks:
- LTV:CAC ratio ≥ 3:1 is generally considered healthy
- LTV:CAC < 1:1 means you are losing money on every customer
- CAC Payback Period under 12 months is strong; over 18 months is concerning
What each variable means:
- New Customers — count only net-new customers, not returning or reactivated ones.
- Period — CAC must be calculated for the same time period as the spend (monthly, quarterly, annually).
Worked example: Q3 spend: $45,000 on ads, $30,000 in sales salaries, $5,000 in tools = $80,000 total. New customers acquired in Q3: 320.
CAC = $80,000 ÷ 320 = $250 per customer
If average customer spends $750 lifetime with 50% gross margin → LTV = $375. LTV:CAC = $375 ÷ $250 = 1.5:1 — this business needs to reduce CAC or increase LTV urgently.
Industry CAC benchmarks: SaaS ~$200–$700 | E-commerce ~$10–$90 | Financial services ~$200–$900.