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Customer Acquisition Cost (CAC) Calculator

Calculate customer acquisition cost with this free CAC calculator.

Marketing campaigns costs

The money you spent on social media and contextual advertising or banners

Employees’ salaries

The money marketers and other employees were paid for the project

Software costs

The costs of hostings, email service providers, product recommendation platforms, and other

Additional services costs

Did you hire contractors or consultants? Enter their wages here

Other marketing costs

In case we forgot anything

Number of customers you got for that sum of money

For the same time period as the spendings

The acquisition of one customer costs

CAC is compared to the customer’s lifetime value (LTV). The only way to know whether you are getting customers profitably or at a loss is to calculate the LTV to CAC ratio.

Here’s how you can view the ratio (based on the article by Corporate Finance Institute).

LTV : CAC
1 : 1 or less	The business is working at a loss, you need to make changes as soon as possible.
2 : 1	Customers bring two times more money than it costs to acquire them.
3 : 1	This is the optimal ratio to hit. It means the business model is profitable.
4 : 1	The business is very lucrative: acquiring customers is cheap, and they bring great value to the company.

What does customer acquisition cost mean

Customer Acquisition Cost (CAC) helps a company put a figure on the amount of money spent to acquire a new client in a given timeframe.

To evaluate CAC for your organization, you need to divide the total cost of acquiring a new client, including both advertising and production, by the total number of new purchasers attracted.

CAC =

(Sales Cost + Ads Cost)

Total Number of New Clients

In email marketing, CAC shows the average cost to acquire a new customer with email campaigns and tactics, including multiple expenses like attracting, engaging, and turning website visitors and social media leads to paying buyers.

Why calculate customer acquisition cost

CAC is a critical business measure to check how well your organization is doing.

It's typically reviewed along with Customer Lifetime Value (LTV) to provide a comprehensive and clear understanding of how much net revenue you're getting from a client — from the time they are acquired to the end of their partnership with your brand.

How to use our customer acquisition cost calculator

Sales & marketing costs

Type in the average cost of getting new leads, including sales and advertising. You can calculate it separately for each channel you use, or combine them all to get a total CAC for your business.

Staff salaries

Enter the precise number you pay to marketers and salespeople for a specific period of time, which can be a month or the length of a project.

Software costs

Fill in the amount you spend on server hosting and maintenance, email marketing services, social media premium plans (if you have any), product review sites, analytics tools, SEO optimization instruments, and other digital services

Outsourced services

Add how much you spend on third-party services such as freelancers, contractors, and consultants.

Other expenses

Include any other expenses we may have forgotten to mention.

Number of acquired customers

Specify the total number of customers you have attracted for the previously chosen period. Should be the same as for the expenses.

Calculate CAC

Factors affecting the rate

In addition to all of the above, there are several other factors that are not included in this CAC calculator but can have a significant impact on your CAC:

Size of your business and the industry in which you operate
Conversion of the outreach and promotion methods you use
Sales processes and workflow
Market in which you operate

Best ways to improve your CAC

There are a few evergreen tips for improving your CAC rates:

Make sure your social media clearly communicates the value you provide to your target audienc

Nurture your leads to arise brand awareness and build loyalty among your subscribers

Run affiliate and referral programs to attract new customers for free

Gain fresh insights from client opinions and improve your product to increase LTV

Don't take your average customers out of their comfort zone and connect with them through chatbots and messengers

Build up a new regular routine of calculating your Customer Acquisition Cost over a set period of time.

This acquisition cost calculator will help you detect the areas for improvement on time and allocate your efforts in promotion and marketing the right way for quick and easy CAC recovery.

Calculate CAC