How we calculate CAC

CAC answers how much it costs, on average, to win a new customer in a period. It only makes sense when compared to CLV and average ticket size.

Use the CAC Calculator

Formula

CAC = (marketing spend + sales spend) ÷ new customers

Variables

spend
Paid media, tools, agencies, commissions, and salaries for marketing and sales teams in the period.
new customers
Customers who made their first purchase during the same period.

Step-by-step calculation

  1. We add up all acquisition costs for the period.
  2. We divide by the number of new customers.
  3. We also show the cost per 10 customers to make projections easier.

Worked example

Inputs

  • Spend: $8,000
  • New customers: 40

Calculation

8,000 ÷ 40

CAC of $200 per customer.

Common mistakes

  • Counting returning customers as new.
  • Leaving out salaries and tools, which understates CAC.
  • Comparing one month's spend with customers who close months later, in long sales cycles.

Frequently asked questions

What CLV/CAC ratio is healthy?

A common industry benchmark is 3 to 1 or higher; below 1 means acquisition is destroying value.

All values are in US dollars (US$). Results are estimates and do not replace professional advice.

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