How this calculator works
Customer acquisition cost adds all the spending used to win customers, including marketing, sales salaries, commissions, advertising and agency fees, and divides it by the number of new customers acquired in the same period. Include fully loaded sales costs, not just advertising, or the figure will flatter the business. Compare CAC with customer lifetime value: a business that spends more to win a customer than that customer returns is losing money on every sale.
Formula
CAC = (marketing spend + sales spend) / new customers acquired. Cost of 100 new customers = CAC × 100.
Worked example
Marketing of $10,000 and sales of $5,000 over a period give $15,000 of acquisition spend. With 150 new customers the CAC is $100, and 100 new customers cost $10,000.
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Frequently asked questions
Which costs belong in CAC?
Everything spent to attract and convert new customers: advertising, content, events, sales salaries and commissions, sales tools and agency fees. Money spent on keeping existing customers is retention cost, not acquisition cost, and should be reported separately.
Should organic customers be included?
Include them in the customer count even though they may have no direct ad spend, because the goal is the blended cost of all growth. Paid-only CAC is useful too, but say which version you are reporting.
What is a good CAC?
One you can repay from a customer's profit while still making a return. Compare CAC with gross profit per customer or lifetime value. A CAC that looks high may be fine in a business with large repeat purchases and a low churn rate.