Customer acquisition cost calculator

Customer acquisition cost is what you spend on marketing and sales for each new customer. Add what a customer pays you each month to see how long it takes to earn that back.

What you spent and what it brought in

Marketing spend

Ads, tools, agencies and marketing wages.

Sales spend (optional)

Sales wages, commissions and tools.

Other acquisition costs (optional)

Free trials, onboarding, sign-up offers.

New customers

Won in the same period.

Payback and lifetime value

Optional. For subscriptions and other repeat revenue.

Monthly revenue per customer (optional)

Gross margin (optional)

Monthly churn (optional)

Share of customers who leave each month.

Result

Enter what you spent and how many new customers it brought in.

Customer acquisition cost
Total acquisition spend
CAC payback
Customer lifetime value
LTV:CAC

The CAC formula

CAC = (marketing spend + sales spend + other acquisition costs) ÷ new customers won. Spend $8,000 on marketing and $4,000 on sales in a quarter, win 40 new customers, and each one cost $300 to acquire.

Use the same period for costs and customers. If people usually take a month or two to buy, a quarter gives a steadier figure than a single month.

CAC payback period

Payback months = CAC ÷ monthly gross profit per customer. A customer who pays $100 a month at a 75% gross margin leaves $75 a month. With a $300 CAC, they pay back what they cost to win in 4 months. Until then, growth uses cash rather than making it.

Without a gross margin, the calculator works the payback out on revenue and says so. That figure flatters you, because part of each payment goes on the cost of serving the customer.

Lifetime value and LTV:CAC

Lifetime value = monthly gross profit per customer ÷ monthly churn rate. If 3% of customers leave each month, the average customer stays about 33 months, and at $75 a month that is $2,500 of gross profit. Divided by the $300 CAC, that is an LTV:CAC of 8.3 : 1.

This simple formula assumes customers leave at a steady rate and ignores upgrades and price changes. Treat the result as a rough guide, and trust the payback period more when churn is still uncertain.

Questions people ask

What costs go into customer acquisition cost?

Everything you spent to win new customers in the period: ad spend, marketing tools and agencies, content and events, and the part of sales and marketing wages spent on new business. Leave out the cost of serving customers you already have.

Should CAC include salaries?

For a true CAC, yes: the time your team spends winning new customers is a cost of getting them. Many businesses also track a "paid CAC" with ad spend only. Both are useful, as long as you label which one you are looking at and compare like with like.

What is the CAC payback period?

The number of months a new customer takes to pay back what it cost to win them, counting only the gross profit they bring in each month. A $300 CAC and $75 of monthly gross profit per customer is a 4-month payback.

How is LTV:CAC worked out here?

Lifetime value is the monthly gross profit per customer divided by the monthly churn rate, which assumes customers leave at a steady rate. The ratio is that lifetime value divided by CAC: how many dollars of gross profit each acquisition dollar brings back over a customer's life.