CAC Calculator: Customer Acquisition Cost

About This Tool

Everything You Need to Know About the CAC Calculator (Customer Acquisition Cost)

Customer acquisition cost (CAC) is the average sales and marketing spend needed to win one new customer. Read next to revenue and margin, it shows whether growth pays for itself.

How to Use

How to Use the CAC Calculator

Choose one period, such as last month or last quarter. Use it for every field.
In Marketing spend ($), enter ad spend, agency fees, content, tools and marketing salaries for the period.
In Sales spend ($), enter sales salaries, commissions and sales software for the same period.
In New customers acquired, enter the number of new paying customers won in the period.
Optional: in Average monthly revenue per customer ($, optional), enter what a typical new customer pays each month.
Optional: in Gross margin % (optional), enter your gross margin. The payback period uses monthly revenue times this margin.
Read Your CAC, then the rows for total acquisition spend, new customers acquired, CAC payback period (months) and the Max LTV:CAC 3:1 target LTV.

Guide

The CAC Formula and Payback Period

The basic formula, as set out by Amplitude, divides sales and marketing costs by new customers. The payback period then shows how long a customer takes to repay that cost. Amplitude gives payback as CAC divided by monthly revenue. Equals adjusts it for gross margin, which is the version the calculator uses, because revenue alone ignores the cost of serving the customer.

Total acquisition spend     = Marketing spend + Sales spend
CAC                         = Total acquisition spend ÷ New customers acquired
Monthly gross profit        = Monthly revenue per customer × Gross margin
CAC payback period (months) = CAC ÷ Monthly gross profit
Target LTV at 3:1           = CAC × 3

Example: A software company spends $18,000 on marketing and $12,000 on sales in one quarter and wins 60 new customers. Total acquisition spend is $18,000 + $12,000 = $30,000, so CAC is $30,000 ÷ 60 = $500. Each customer pays $80 per month at a 75% gross margin, which is $80 × 0.75 = $60 of gross profit per month. The CAC payback period is $500 ÷ $60 = 8.3 months. On revenue alone it would look like $500 ÷ $80 = 6.25 months, which is why the calculator uses margin. The target LTV at 3:1 is $500 × 3 = $1,500. These figures are an illustration, not a benchmark.

Equals says most investors and industry experts treat a payback of 12 months or less as a good benchmark for SaaS startups. Shorter is better, and consumer businesses usually run lower acquisition costs than enterprise sellers.

Guide

What to Count as Acquisition Spend

CAC only means something if you are clear about which costs you included. Amplitude describes three common versions.

Version	What it includes	Best for
Basic CAC	Ad spend and agency fees, sales and marketing salaries, content and creative, sales and marketing software, production costs	Routine tracking
Fully loaded CAC	Everything in basic CAC plus overhead such as office space, legal fees for sales and marketing contracts, and new-customer discounts	Investors and fundraising
Paid CAC	Marketing and sales spend without salaries and overhead, divided by customers from paid channels only	Performance marketing teams

The calculator gives a blended figure: all the spend you enter divided by all new customers. If you want paid CAC, enter only paid channel spend and only the customers those channels brought in. We suggest writing down which version you use, so month-to-month comparisons stay fair.

Guide

How CAC Fits With LTV

CAC on its own does not say whether a customer is worth winning. Compare it with customer lifetime value (LTV), the revenue a customer brings over the whole relationship. Amplitude calls a 3:1 LTV to CAC ratio a common benchmark, which means $3 of revenue for every $1 spent on acquisition. A ratio under 3:1 can point to overspending or weak retention. A ratio over 5:1 can mean you have room to spend more on growth.

The calculator does not ask for churn or customer lifetime, so it cannot calculate your actual LTV. It does show the Max LTV:CAC 3:1 target LTV, which is CAC × 3: the lifetime value a customer needs for a 3:1 ratio. Work out your real LTV separately and compare it with that target.

One more check: if a period has spend but zero new customers, CAC cannot be calculated in any useful way. Omni Calculator describes it as infinite. Treat that as a signal to look at the channel, not as a number to report.

Good to Know

Limits and What to Check

Time lag. Spend in one month often wins customers the next. For long sales cycles, use a quarter or shift the customer count by your typical cycle length.
Blended hides channels. Organic and referral customers lower a blended CAC. Run each paid channel separately to see its true cost.
New customers only. Do not count renewals or upgrades from existing customers.
Margin matters. Payback divides CAC by monthly revenue times gross margin, so an overstated margin makes payback look shorter than it really is.
Lower is not always better. A very low CAC from a tiny budget may not hold when you scale spend. Test at the budget you plan to run.

Tips

Tips for Better Results

Use the same period for spend and customers, and match it to your typical sales cycle.
Count only new paying customers, not renewals, upgrades or free trial sign-ups.
Enter your real gross margin, not a hoped for one. Payback divides by monthly gross profit, so a high guess shortens it.
Run the calculator once per paid channel to find which channels are expensive.
Write down whether your figure is basic, fully loaded or paid CAC so comparisons stay fair.
Track CAC monthly and watch the trend, not a single result.

FAQ

Frequently Asked Questions

Quick answers about the CAC Calculator (Customer Acquisition Cost).

How do you calculate customer acquisition cost?

Add your marketing and sales spend for a period and divide by the number of new customers won in that period. If you spent $10,000 and gained 40 customers, CAC is $10,000 ÷ 40 = $250. Use the same period for spend and customers, and count only new paying customers.

What costs should be included in CAC?

Basic CAC usually includes ad spend, agency fees, sales and marketing salaries, content and creative work, and sales and marketing software. Fully loaded CAC adds overhead such as office costs and new-customer discounts. Paid CAC leaves out salaries and overhead and counts only customers from paid channels.

What is CAC payback period?

CAC payback period is the number of months a customer takes to repay what you spent to acquire them. Divide CAC by monthly gross profit per customer, which is monthly revenue times gross margin. This calculator uses that margin based version. Equals notes that 12 months or less is a common benchmark for SaaS startups.

What is a good LTV to CAC ratio?

Amplitude describes 3:1 as a common benchmark, which means a customer brings three dollars of lifetime revenue for every dollar spent to acquire them. A lower ratio can mean you are overspending or losing customers too quickly. A ratio above 5:1 can mean there is room to invest more in growth.

What is the difference between blended and paid CAC?

Blended CAC divides all sales and marketing spend by all new customers, including those from organic search and referrals. Paid CAC uses only paid channel spend and only customers from those channels. Blended CAC usually looks lower. Paid CAC shows what each new customer from advertising really costs.

Is this CAC calculator free?

Yes. The CAC calculator is free and needs no account or sign-up. It runs in your browser. Enter marketing spend, sales spend and new customers to get CAC, and add monthly revenue and gross margin if you also want an estimate of the payback period in months.

CAC Calculator (Customer Acquisition Cost)