Customer Acquisition Cost (CAC) Calculator
Customer Acquisition Cost (CAC) measures how much it costs to acquire one new customer. Enter your total marketing spend and the number of customers acquired, and this calculator shows your CAC. Optionally enter your Customer Lifetime Value (LTV) to see the LTV:CAC ratio, which tells you whether your acquisition economics are sustainable.
CAC is calculated as Total Marketing Spend / Number of Customers Acquired. It's a critical unit economics metric — if your CAC exceeds your LTV, you're losing money on every customer you acquire, which is only sustainable if you're deliberately investing in growth with a clear path to profitability.
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By The Paper Room Editorial Team — Calculators
Frequently asked questions
What costs should I include in CAC?▼
Include all costs directly related to acquiring customers: ad spend, marketing team salaries, sales team salaries, tools and software used for acquisition, content production costs, and any agency fees. Some companies include only marketing spend (simple CAC), while others include sales costs too (fully loaded CAC). Be consistent in your definition.
What's a good CAC?▼
There's no universal answer — it depends on your LTV. A $500 CAC is excellent if your LTV is $5,000 (10:1 ratio) but terrible if your LTV is $200. The LTV:CAC ratio is the real benchmark: aim for at least 3:1, meaning each customer generates at least 3x what you spent to acquire them.
How do I reduce CAC?▼
Focus on higher-converting channels, improve your conversion funnel, invest in organic/content marketing (which has compounding returns), get referrals from existing customers, and optimize your ad targeting. Reducing CAC often has a bigger impact on profitability than increasing revenue.