Customer Acquisition Cost (CAC) is the core metric for measuring how efficiently you turn spend into paying customers. Enter your marketing and sales spend plus new customers to instantly get CAC, LTV/CAC ratio, payback period and an acquisition efficiency rating. All data stays in your browser — nothing is uploaded.
📊 Acquisition Spend & Results
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What is Customer Acquisition Cost (CAC)?
CAC (Customer Acquisition Cost) is the total sales and marketing cost required to earn one new customer. It connects two numbers every business tracks: how much you spend and how many customers you gain. The formula is:
CAC = (Marketing Spend + Sales Spend) ÷ New Customers
Example: you spend $10,000 on ads and $6,000 on sales this month, acquiring 100 new customers. Your CAC = $16,000 ÷ 100 = $160 per customer. Every new paying customer costs you $160 on average.
Why the LTV/CAC ratio matters
CAC alone tells only half the story. If it costs $160 to acquire a customer worth only $100 in lifetime value, every sale loses money. The industry benchmark is LTV/CAC ≥ 3: lifetime value should be at least 3x acquisition cost for a healthy, sustainable business. A ratio below 1 means you lose money on every customer; a very high ratio may mean you are too conservative and leaving growth on the table.
Payback period
Payback = CAC ÷ (LTV ÷ 12). It tells you how many months it takes to recover the acquisition cost from one customer. SaaS companies typically target 12 months or less. Shorter payback means less cash pressure and more room to reinvest in growth.
Use Cases
- SaaS monthly review: track CAC and LTV/CAC each month to decide whether to scale or cut acquisition channels
- Paid ads evaluation: compare CAC across channels (search, social, influencers) and shift budget to the efficient ones
- Startup fundraising: show investors your unit economics to prove the business can scale profitably
- E-commerce operations: check whether promo spend is eating your margin after factoring in AOV and repurchase rate
Industry Benchmarks
| Business type | Typical CAC range | Healthy LTV/CAC | Target payback |
|---|---|---|---|
| SaaS / B2B software | $50 - $1,000 | ≥ 3x | ≤ 12 months |
| E-commerce / DTC | $10 - $80 | ≥ 2x - 3x | ≤ 6 months |
| Fintech / Insurance | $100 - $2,000 | ≥ 3x - 5x | ≤ 18 months |
| Content / Tools | $1 - $20 | ≥ 2x | ≤ 3 months |
How to Lower CAC
- Optimize the funnel: a 1% lift in landing page conversion can cut CAC by 10%-20%
- Focus on high-intent channels: drop low-quality traffic and concentrate budget on organic search and word of mouth
- Boost retention and referrals: referred customers often cost 1/3 to 1/5 of paid-channel CAC
- Shorten the sales cycle: better sales assets and process cut the sales labor allocated per deal
FAQ
What is the difference between CAC and CPA?
CAC includes all sales and marketing costs (people, tools, overhead); CPA (cost per action) counts only the ad cost of a single conversion. CAC is broader; CPA is focused on one advertising action.
How do I estimate LTV?
A common formula: LTV = average order value × purchases per month × average customer lifetime (months) × gross margin. To stay conservative, discount your estimate by 20%-30%.
Why is my LTV/CAC below 1?
It means acquisition costs exceed customer lifetime value — you lose money on every customer you acquire. Improve conversion rate, raise pricing or extend retention before scaling spend.
Does this calculator upload my data?
No. All calculations happen locally in your browser. Nothing is sent to any server, and history is stored only in your browser's local storage.