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CAC Calculator

Calculate customer acquisition cost (CAC) from sales and marketing spend, and check the LTV:CAC ratio that tells you if growth pays.

Total sales & marketing spend

New customers acquired

Average customer LTV (optional)

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How it works

CAC = total sales & marketing spend ÷ new customers acquired · LTV:CAC ratio = customer LTV ÷ CAC

Customer acquisition cost is what you pay, on average, to win one new customer — total sales and marketing spend divided by the number of customers that spend produced. On its own CAC is just a number; it only means something next to lifetime value. The LTV:CAC ratio compares the two, and a widely cited benchmark is 3:1 — a customer should be worth about three times what it costs to acquire them. A ratio below 1 means you lose money on every customer; a very high ratio can mean you are underinvesting in growth.

Worked example

Spending $50,000 on sales and marketing to acquire 250 new customers gives a CAC of 50,000 ÷ 250 = $200. If each customer is worth $1,200 in lifetime value, the LTV:CAC ratio is 1,200 ÷ 200 = 6:1 — comfortably above the 3:1 healthy benchmark.

Frequently asked questions

What should be included in CAC?

All the costs of acquiring customers over the period: ad spend, the salaries and commissions of sales and marketing staff, agency and tool costs, and content and creative production. Dividing that fully-loaded spend by new customers gives a truer CAC than counting ad spend alone.

What is a good LTV:CAC ratio?

A common target is 3:1 — each customer worth roughly three times their acquisition cost, leaving room for overhead and profit. Below 1:1 you lose money per customer. A ratio far above 3:1, such as 6:1 or 10:1, can actually signal underinvestment — you might grow faster by spending more on acquisition.

What is CAC payback?

CAC payback is how many months of a customer’s margin it takes to earn back their acquisition cost. A CAC of $200 against $50 of monthly gross margin per customer pays back in four months. Shorter payback frees cash to reinvest and reduces the risk that churn erases the return before you recoup CAC.

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Educational estimate, not financial advice.