Introduction
Customer Acquisition Cost (CAC) is how much money your business spends to get one new customer. This number helps you understand if your marketing is working well. To find your CAC, you add up all the money spent on sales and marketing, then divide by the number of new customers you got. For example, if you spent $1,000 on ads and got 10 new customers, your CAC is $100 per customer.
Knowing your CAC helps you make smart choices about your business. If it costs too much to get new customers, you might lose money. A good CAC means you spend less to get customers than they pay you back. This calculator makes it easy to find your CAC quickly. Just enter your marketing costs and customer numbers to see if your spending makes sense. For businesses looking to improve their long-term profitability, you might also want to check our Dividend Calculator to understand potential returns on investments.
How to use our CAC Calculator
Enter your business costs and customer numbers to find out how much you spend to get each new customer. The calculator will show your Customer Acquisition Cost (CAC) and compare it to other businesses.
Time Period: Pick if you want to calculate costs for a month, quarter, or year by clicking the matching button.
Marketing Expenses: Type in all the money you spent on marketing like ads, content, tools, and marketing team pay.
Sales Expenses: Enter what you paid for sales including sales team pay, bonuses, CRM tools, and travel costs.
Number of New Customers: Put in how many brand new customers you got during your chosen time period (not old customers).
Customer Lifetime Value (Optional): Add how much money you expect to make from one customer over their whole time with your business to see if your CAC is worth it.
Industry: Choose your type of business from the list to see how your costs compare to similar companies.
Understanding Customer Acquisition Cost (CAC)
Customer Acquisition Cost, or CAC, is the total amount of money your business spends to get one new customer. This important number helps you understand if your marketing and sales efforts are working well. Think of it like this: if you spend $1,000 on ads and sales work, and you get 10 new customers, your CAC is $100 per customer.
Why CAC Matters for Your Business
Knowing your CAC helps you make smart choices about how to grow your business. If it costs too much to get new customers, you might lose money. The best businesses keep their CAC low while still bringing in good customers. You want to spend less to get each customer than the money they will bring to your business over time. For those planning early retirement strategies, understanding business metrics like CAC alongside tools like our Coast FIRE Calculator can help you determine when your investments might support your lifestyle.
What Goes Into CAC
Your CAC includes all the money you spend on marketing and sales. Marketing costs include things like online ads, making content, paying for marketing tools, and the salaries of marketing workers. Sales costs include paying your sales team, their bonuses, software for tracking customers, and any travel costs. Add all these costs together, then divide by the number of new customers you got during that time. If you're analyzing various business investments, you may also find our Dividend Yield Calculator useful for comparing different investment returns.
Using CAC to Improve Your Business
Once you know your CAC, compare it to how much money each customer brings in over time (called Lifetime Value or LTV). A healthy business usually has customers worth at least three times more than it costs to get them. This is called the LTV to CAC ratio. You should also track your CAC over time to see if it's going up or down. Different types of businesses have different normal CAC levels, so it helps to know what's typical for your industry.