CAC Calculator
Find what it costs to win each new customer, and whether their lifetime value makes it worth it.
- LTV : CAC ratio
- 4×
- Total acquisition cost
- $15,000.00
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How to use the CAC calculator
- Enter your marketing spend for the period, such as ads, influencers and promotions.
- Add other acquisition costs like sales wages, agency fees and marketing software, and the number of new customers won.
- Enter customer lifetime value to see your LTV to CAC ratio.
CAC formulas
Count only new customers in the same period as the spend. Including repeat buyers makes CAC look lower than it is.
Example
A brand spends 12,000 on marketing and 3,000 on tools and freelancers, winning 250 new customers. CAC is 60. If a customer is worth 240 over their lifetime, the LTV to CAC ratio is 4×.
What is a good LTV to CAC ratio?
A common benchmark is 3× or more: each customer brings in at least three times what they cost to acquire. Below 1× you lose money on every customer; far above 5× may mean you could grow faster by spending more.
How to lower CAC
Improve conversion rates on your store, focus spend on your best channels, build organic traffic like SEO and referrals, and increase repeat purchases so customers are worth more.
Frequently asked questions
How do I calculate CAC?
Divide all acquisition costs in a period by the number of new customers won in that period.
Should CAC include salaries?
Include wages for people whose job is winning customers, like sales or performance marketing staff.
What is LTV?
Customer lifetime value: the total gross profit (or revenue) a customer brings over their relationship with you.
What is the difference between CAC and CPA?
CPA is the cost per any action, such as an order; CAC is the cost per new customer only.
How often should I check CAC?
Monthly for most businesses, and per channel when you can.
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