Calculate your Customer Acquisition Cost (CAC) by entering your cost of marketing, cost of sales, and number of new customers acquired. You'll get back your CAC per customer along with a breakdown of your total spend — helping you measure how efficiently your business is winning new customers.
Customer Acquisition Cost (CAC)
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Total Acquisition Spend
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Marketing Cost Share
Sales Cost Share
Customer acquisition cost (CAC) is the total amount of money a business spends to acquire a single new customer. It includes all marketing and sales expenses incurred over a given period, divided by the number of new customers gained in that same period. A lower CAC generally indicates a more efficient business.
The CAC formula is: CAC = (Cost of Marketing + Cost of Sales) / Number of New Customers. For example, if you spent $1,000 on marketing and $12,000 on sales and acquired 1,000 new customers, your CAC would be ($1,000 + $12,000) / 1,000 = $13 per customer.
No, CAC cannot be negative. Both marketing and sales costs are always zero or positive values, and the number of customers is always a positive number. A CAC of zero would only theoretically occur if you spent nothing on marketing or sales, which is extremely rare in practice.
If zero new customers were acquired during a period, CAC is mathematically undefined — you cannot divide by zero. In this scenario, it means your marketing and sales efforts did not result in any new customers, and the spending in that period was entirely unproductive from an acquisition standpoint.
A 'good' CAC depends heavily on your industry, business model, and customer lifetime value (LTV). As a general rule, your LTV should be at least 3 times your CAC (LTV:CAC ratio of 3:1 or higher). If CAC exceeds LTV, your business is spending more to acquire customers than it earns from them.
You can reduce CAC by improving your marketing targeting to attract higher-quality leads, optimizing your sales process to convert more efficiently, investing in organic channels like SEO and referrals, and retaining existing customers to reduce dependence on constant new acquisition. A/B testing your campaigns can also help identify what delivers the best ROI.
CAC should include all costs directly tied to acquiring new customers: advertising spend, marketing team salaries, sales team salaries and commissions, CRM and sales tool costs, agency fees, and any other expenses specifically aimed at attracting and converting new customers. Overhead costs not directly related to acquisition are typically excluded.
CAC and LTV are closely linked metrics. LTV measures how much revenue a customer generates over their entire relationship with your business, while CAC measures what it cost to acquire them. Comparing the two (LTV:CAC ratio) tells you whether your acquisition spending is sustainable and profitable. Most healthy businesses target an LTV:CAC ratio of 3:1 or greater.