CAC calculator: customer acquisition cost, payback and LTV:CAC

Type in what you spent on marketing and sales and how many customers you won. This CAC calculator gives you customer acquisition cost, the months each customer takes to pay it back, your LTV:CAC ratio, and the most you can spend per customer and still hit your payback target. It also splits paid CAC from blended CAC, which most CAC calculators skip.

Nothing you type is stored or sent anywhere. The calculator runs in your browser.

How to use the CAC calculator

1. Pick one period, a month or a quarter, and use it for every cost and the customer count.
2. Enter marketing spend, sales spend and other acquisition costs for that period. Include salaries for the share of time spent winning new customers.
3. Enter the number of new paying customers you won in the same period.
4. Add average revenue per customer per month, your gross margin and your monthly churn. These turn CAC into payback and LTV.
5. If you run paid ads, add that channel's spend and the customers it brought in to see paid CAC next to blended CAC.
6. Press Copy summary to paste the result into a board update or a budget email.

How it works: the customer acquisition cost formula

The calculator uses seven formulas. All of them are shown here so you can check the result by hand.

• Blended CAC = (marketing spend + sales spend + other acquisition costs) ÷ new customers won.
• Monthly gross profit per customer = revenue per customer per month × gross margin %.
• CAC payback (months) = CAC ÷ monthly gross profit per customer.
• LTV = monthly gross profit per customer ÷ monthly churn %. This is the simple steady-churn version, before any discounting.
• LTV:CAC = LTV ÷ CAC.
• Max CAC for your target payback = monthly gross profit per customer × target months.
• Paid CAC = paid channel spend ÷ customers from paid channels.

Two choices in the method come from Andreessen Horowitz's 16 startup metrics. CAC should be the full cost of acquiring a customer, and a common mistake is to leave out referral fees, credits or discounts, which is why there is a separate field for them. The same piece warns that a blended CAC, which counts customers who arrived organically, doesn't tell you whether paid campaigns are profitable, and says many investors want both numbers. Payback uses gross profit, not revenue, because revenue you spend on serving the customer can't repay what you spent to win them.

Worked example: CAC for a B2B service

These are the example numbers the calculator loads with. Your numbers will differ.

• Total acquisition cost: $18,000 marketing + $24,000 sales + $3,000 referral fees = $45,000.
• Blended CAC: $45,000 ÷ 30 new customers = $1,500.
• Monthly gross profit per customer: $250 × 80% = $200.
• CAC payback: $1,500 ÷ $200 = 7.5 months.
• LTV: $200 ÷ 2.5% monthly churn = $200 ÷ 0.025 = $8,000.
• LTV:CAC: $8,000 ÷ $1,500 = 5.3 to 1.
• Max CAC for a 12-month payback: $200 × 12 = $2,400.
• Paid CAC: $9,000 of ad spend ÷ 12 customers from ads = $750.

The paid CAC looks cheap next to the blended number because it only counts ad spend. Sales salaries sit in the blended figure. If your sales team also works the paid leads, add their share to the paid channel spend to compare like with like.

What a good CAC looks like, and what to do next

A good CAC is one you earn back fast enough. There is no single dollar figure that fits every business, so measure it by payback and by LTV:CAC. For subscription businesses, David Skok's SaaS Metrics 2.0 says the best companies have an LTV to CAC ratio above 3, and that many of the best recover CAC in 5 to 7 months. He describes profitability as weak when recovery takes longer than 12 months, which is why the calculator starts with a 12-month target.

If your payback is too long, there are three levers. You can lower CAC, raise revenue per customer, or raise gross margin. Most teams start with CAC, and most wasted acquisition spend goes on reaching the wrong people.

• Check the list before you pay for outreach. Our nine checks before buying a B2B email list stop you paying for contacts who never reply.
• Email the person who signs. Finding the decision maker at a company cuts the number of touches per deal.
• Track reply rate per campaign with the cold email reply rate calculator, so you can drop channels that drag CAC up.
• Size the market before you scale spend. The TAM SAM SOM calculator shows how many accounts you can reach before costs start to climb.

CAC calculator questions

How do you calculate customer acquisition cost?

Add up everything you spent to win new customers in a period: marketing, sales salaries and commissions, tools, and costs like referral fees or sign-up discounts. Divide by the number of new customers won in the same period. For example, $45,000 spent and 30 new customers gives a CAC of $1,500. Keep the period the same for costs and customers.

What is the difference between blended CAC and paid CAC?

Blended CAC divides all acquisition costs by all new customers, including those who found you through search or word of mouth. Paid CAC divides the spend on one paid channel by the customers that channel brought in. Blended CAC can look healthy while paid campaigns lose money, so track both, as Andreessen Horowitz's startup metrics guidance suggests.

What is CAC payback period?

It is the number of months a customer takes to repay what you spent to win them. Divide CAC by the monthly gross profit per customer, which is monthly revenue times gross margin. A $1,500 CAC and $200 of monthly gross profit gives a 7.5-month payback. David Skok describes profitability as weak when payback runs past 12 months.

What is a good LTV to CAC ratio?

For subscription businesses, David Skok's SaaS Metrics 2.0 says the best companies have an LTV to CAC ratio above 3, sometimes much higher. A ratio near 1 means you spend about as much winning a customer as you make from them. Use gross profit for LTV, not revenue, or the ratio will look better than it is.

Should salaries be included in CAC?

Yes, for the share of time spent winning new customers. Include sales reps, their commissions and the marketing team's time on acquisition. Leave out time spent on existing customers, such as account management or support. If one person splits their week, use an honest estimate of the split and keep it the same each period so trends stay comparable.