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 CalculatorFormula
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
- We add up all acquisition costs for the period.
- We divide by the number of new customers.
- 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.