CAC Calculator

CAC is the total cost of acquiring a new customer. It includes all sales and marketing expenses divided by the number of new customers acquired in that period. For example, if you spend $50,000 on sales and marketing in a month and acquire 100 customers, your CAC is $500.

A good CAC depends on your business model. The key metric is the LTV:CAC ratio. A ratio of 3:1 or higher is generally considered healthy, meaning you earn at least 3x what you spend to acquire a customer. For SMB SaaS, CAC payback periods under 12 months are strong.

Include all costs directly related to acquiring customers: advertising spend, sales team salaries and commissions, marketing team salaries, content production costs, software tools used for acquisition, events, and agency fees. Exclude customer success and support costs.

CAC payback period is the number of months it takes to recover the cost of acquiring a customer. It is calculated by dividing your CAC by the average monthly revenue per account (ARPA). A payback period under 12 months is considered efficient for most SaaS businesses.

LTV:CAC ratio compares customer lifetime value to acquisition cost. A 3:1 ratio means each customer generates $3 in value for every $1 spent acquiring them. Below 1:1 means you are losing money on each customer. Above 5:1 may indicate underinvestment in growth.

Common strategies include improving conversion rates in your funnel, investing in organic channels like SEO and content marketing, optimizing ad targeting and spend, building referral programs, and reducing sales cycle length. Understanding why customers churn also helps, since retaining customers improves your effective CAC over time.

Yes. Blended CAC is useful for overall benchmarking, but channel-specific CAC helps you allocate budget effectively. Track CAC separately for paid ads, organic, referrals, partnerships, and outbound sales to identify which channels deliver the most efficient growth.