Customer acquisition cost calculator
Enter what you spent on sales and marketing and how many new customers it brought. Add lifetime value to see whether those customers pay back.
Formula
CAC = sales and marketing spend ÷ new customers
Count every cost of winning customers in the period: ad spend, agency and creator fees, discounts given to first orders and marketing tools. Count only first-time buyers.
New to the term? Read what CAC means in the glossary.
How to calculate customer acquisition cost: a worked example
A store spends $15,000 on marketing in a quarter and wins 320 new customers. Each customer is worth $140 in lifetime gross profit.
- CAC = $15,000 ÷ 320 = $46.88
- LTV to CAC = $140 ÷ $46.88 = 3.0
- Profit per customer after CAC = $140 − $46.88 = $93.13
Each new customer costs $46.88 and returns about three times that over their lifetime.
What is a good CAC?
A good CAC is below the gross profit a customer brings you. The sooner it pays back, the better: CAC payback in orders = CAC ÷ (average order value × gross margin).
If the store above has a $55 average order and a 55% margin, the first order leaves $30.25, so CAC pays back after 1.6 orders. Customers who never reorder lose money; everyone else makes it.
Questions about customer acquisition cost
- What's the difference between CAC and CPA?
- CAC counts all sales and marketing spend per new customer. CPA usually counts ad spend per conversion, which can include repeat orders. CAC is stricter and the one to use for deciding whether growth pays.
- What is blended CAC?
- Blended CAC divides all marketing spend by all new customers, including those who found you through search, word of mouth or social posts. It's lower than paid CAC and shows what the whole program costs per customer.
- Why does my CAC keep rising?
- The first customers are the cheapest: the people most ready to buy find you first. As you spend more, you reach colder audiences. Better pages and offers help, because they raise the share of those colder visitors who buy.
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