Customer Acquisition Cost Calculator
What one new customer costs you, and whether they are worth it. Enter your spend and new customers to get CAC, the LTV ratio and your payback period.
Your numbers
$50,000 of sales and marketing across 100 new customers
A 4.8:1 ratio clears the 3:1 figure that circulates as a rule of thumb in subscription businesses. Treat it as a convention rather than a law — it is a widely repeated planning heuristic, not a measured benchmark.
The arithmetic
CAC = (marketing + sales spend) ÷ new customersLTV : CAC = lifetime value ÷ CACpayback months = CAC ÷ monthly gross profit per customerEvery figure above comes from an input you set. There are no industry averages baked in, because an average you cannot check is worse than no number at all.
The number, and the three ways it gets fudged
Customer acquisition cost is total sales and marketing spend divided by new customers won. The formula is not the hard part. Almost every misleading CAC figure comes from one of three decisions made before the division.
1. Leaving salaries out
Media-only CAC is a useful channel-comparison metric and a dangerous business metric. If a salaried team is required to win those customers, their cost is part of what a customer costs. Report both if you like, but never compare a media-only figure in one channel against a loaded figure in another.
2. Counting the wrong customers
Renewals, expansions and repeat orders from existing customers are not acquisitions. Folding them in is the quickest way to make an unhealthy CAC look fine, and it hides the exact problem you built the metric to detect.
3. Using revenue as lifetime value
LTV should be gross profit over the customer's life, not revenue. A business on 40% margin that quotes revenue LTV reports a ratio two and a half times better than the truth. This is the most common single error in the metric.
Payback matters more than the ratio
A strong LTV:CAC ratio with a long payback period is a cash-flow problem wearing a good disguise. If a customer takes 30 months to repay their acquisition cost, every new customer makes you poorer before they make you richer — and growth accelerates the squeeze. Both numbers are above, because you need both.
Organic search changes the shape of this calculation rather than the arithmetic: the cost is a fixed monthly fee that does not rise with each additional customer, so CAC falls as volume grows. The SEO ROI calculator models that side.