Customer acquisition cost (CAC) calculator
Customer acquisition cost is what you spend to win one new customer. Enter the marketing and sales spend of a period and the new customers won in it. Add the monthly revenue per customer and your gross margin to get the CAC payback period: how many months of gross profit it takes to earn back what the customer cost.
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How to use it
- Enter the marketing spend and sales spend for a period (a month, a quarter).
- Enter the new customers won in the same period.
- For the payback period, add the monthly revenue per customer and your gross margin.
- CAC = (marketing + sales) ÷ new customers
- Marketing-only CAC = marketing ÷ new customers
- Monthly gross profit per customer = monthly revenue × gross margin
- CAC payback (months) = CAC ÷ monthly gross profit per customer
Worked example
A month with 20,000 on marketing and 10,000 on sales brought 150 new customers paying 50 a month at an 80% gross margin:
- CAC = 30,000 ÷ 150 = 200.00.
- Marketing-only CAC = 20,000 ÷ 150 = 133.33.
- Gross profit per customer 50 × 0.8 = 40.00 a month.
- Payback = 200 ÷ 40 = 5 months.
Common mistakes
- Counting only ad spend. Salaries, tools and agencies are part of acquiring customers.
- Mixing periods. Spend and new customers must come from the same period; with long sales cycles, compare spend with the customers it brought later.
- Using revenue instead of gross profit for payback. The cost of serving the customer has to be paid first.
Frequently asked questions
How do you calculate CAC?
CAC = (marketing spend + sales spend) ÷ new customers won in the same period. 30,000 spent to win 150 customers is a CAC of 200.
What costs belong in CAC?
Everything spent to win new customers: ads, content, tools, agencies, and the salaries and commissions of marketing and sales staff. Leave out costs of serving existing customers, such as support.
How is the CAC payback period calculated?
CAC ÷ (monthly revenue per customer × gross margin). With a CAC of 200, revenue of 50 a month and an 80% margin, each customer brings 40 of gross profit a month, so payback takes 5 months.
What is a good CAC?
It depends on what a customer is worth. Compare CAC with customer lifetime value: if a customer brings less gross profit over their lifetime than they cost to acquire, growth loses money.