Free tool
CAC calculator: fully loaded customer acquisition cost
Convertica's free CAC calculator adds up what a new customer really costs to win: ad spend, salaries, agency fees, tools and creative, line by line, divided by the new customers the period brought in. It shows the ad-spend-only and paid figures beside the fully loaded one, then how many months the cost takes to earn back. Any currency, no sign-up. CAC here means customer acquisition cost, not the coronary artery calcium score.
Short answer
A CAC calculator divides the total sales and marketing cost for a period by the new customers won in that period. Count every cost, not ad spend alone: salaries, agency fees, tools and creative. Then compare the result with the gross profit a customer brings in each month to see how long the cost takes to earn back.
- Fully loaded CAC counts every sales and marketing cost. A figure built on ad spend alone is lower because it leaves costs out.
- Blended CAC divides by all new customers. Paid CAC divides ad spend by the customers paid channels won.
- CAC counts new paying customers against all sales and marketing cost. CPA counts any conversion you choose against a campaign's cost.
- A good CAC is one your own gross profit earns back within the time you can afford to wait.
- A higher conversion rate lowers CAC at the same spend, because the same cost is divided by more customers.
CAC calculator: cost lines and new customers
Free to use, no sign-up, any currency. Leave a line empty if it does not apply. The result updates as you type.
Fully loaded CAC
80.00
Total cost: 9,000 + 6,500 + 2,500 + 600 + 1,400 = 20,000. CAC: 20,000 ÷ 250 new customers = 80.00 per new customer.
Ad spend only: 9,000 ÷ 250 = 36.00. Ad spend is 45% of the total cost, so that figure leaves out 44.00 per customer.
Paid CAC: 9,000 ad spend ÷ 120 new customers from paid channels = 75.00. The other 130 new customers came through unpaid channels, which is why ad spend spread over every new customer looks lower.
Formula
fully loaded CAC = (ad spend + salaries + fees + tools + creative + other) / new customers
ad-spend-only CAC = ad spend / new customers
paid CAC = ad spend / new customers from paid channelsCAC payback calculator
How many months a new customer takes to earn back what they cost to win, and the most you can afford to pay for one.
CAC payback period
4 months
Gross profit per customer per month: 40 × 50% gross margin = 20.00.
CAC payback: 80.00 ÷ 20.00 = 4 months before a new customer has earned back what they cost to win, if they stay that long.
In 3 months a customer brings in 60.00 of gross profit: the most you can pay for one and be paid back in that time. Your CAC of 80.00 is 20.00 over it.
LTV to CAC: 360.00 lifetime value ÷ 80.00 CAC = 4.50. Above 1: a customer leaves about 280.00 after their acquisition cost, before overheads.
Formula
gross profit per month = revenue per customer per month * gross margin
CAC payback in months = CAC / gross profit per month
most you can pay = gross profit per month * months you can wait
LTV to CAC ratio = lifetime value / CACDo not have a lifetime value yet? Work it out with the customer lifetime value calculator, for a store or a subscription, and bring the gross-profit figure back here.
What is customer acquisition cost (CAC)?
Customer acquisition cost (CAC) is what a business spends, on average, to win one new paying customer. It is the total sales and marketing cost for a period divided by the new customers won in that period. CAC is a figure for the whole business, so it counts the people and tools behind the ads as well as the ads.
How to use the CAC calculator
- Pick one period. A month or a quarter. Every cost and every customer you enter comes from it.
- Fill in the cost lines. Ad spend first, then salaries, fees, tools, creative and anything else spent to win customers. Leave a line empty if it does not apply.
- Enter new customers. First-time paying customers only, from every channel. Repeat buyers are not new.
- Add the customers from paid channels if your analytics can tell them apart. The result then shows paid CAC beside the blended figure.
- Carry the CAC down. "Use this CAC in the payback calculator" copies it into the second calculator. Add what a customer brings in per month and your gross margin to see the payback period.
Is CAC the same as CPA?
No. CAC divides all sales and marketing cost by new paying customers, for the whole business. CPA, cost per acquisition, divides the cost of one campaign or channel by whatever conversion you chose to count there, which may be a lead, a trial or a sign-up and not a customer. An ad account can report a healthy CPA while CAC is too high, because the ad account sees neither the salaries nor the leads that never bought. The CPA formula guide sets CPA beside CAC, cost per lead and cost per click in one table, with a CPA calculator.
What is the CAC formula?
The CAC formula is total sales and marketing cost divided by the number of new customers, both for the same period. With 20,000 of cost and 250 new customers, CAC is 20,000 / 250 = 80.00. The division is the easy part. What the formula does not settle is which costs count.
CAC = total sales and marketing cost / new customersWhat costs go into CAC?
Every cost of winning new customers goes into CAC. That is the meaning of fully loaded: the ads, the people who plan and sell, the agencies and freelancers, the software, and the creative work. The calculator has one line for each, so nothing is left out by accident.
| Cost line | What belongs in it |
|---|---|
| Ad spend | What you paid the ad platforms and publishers, on every paid channel. |
| Salaries and commissions | Pay, benefits and commissions for the people who do sales and marketing. For someone who splits their time, the share spent on winning new customers. The commission calculator works out what a commission plan pays, on one sale or on a period's sales. |
| Agency and freelancer fees | Retainers and project fees for media buying, search, design, copy and landing pages. |
| Tools and software | CRM, email, analytics, testing and ad tools, for the period. |
| Content and creative | Producing ads, video, photography, pages and articles. |
| Other costs | Events, sponsorships, affiliate and referral payouts, and discounts or free trials given to win the first sale. |
Three things stay out. The cost of the product or of delivering the service is already in gross margin. Support and account management for existing customers is the cost of keeping customers, not of winning them. General overheads such as rent and finance are not acquisition costs either.
How to calculate CAC: a worked example
To calculate CAC, add up every sales and marketing cost for one period, count the new customers won in the same period, and divide. The numbers below are the default values in the calculator: one month for a business that sells online. They are made up to show the arithmetic and are not a benchmark.
| Cost line | Cost | Share of total | Per new customer |
|---|---|---|---|
| Ad spend | 9,000 | 45% | 36.00 |
| Salaries and commissions | 6,500 | 32.5% | 26.00 |
| Agency and freelancer fees | 2,500 | 12.5% | 10.00 |
| Tools and software | 600 | 3% | 2.40 |
| Content and creative | 1,400 | 7% | 5.60 |
| Other costs | 0 | 0% | 0.00 |
| Total | 20,000 | 100% | 80.00 |
- Total cost: 9,000 of ad spend plus 11,000 of salaries, fees, tools and creative = 20,000.
- Fully loaded CAC = 20,000 / 250 = 80.00.
- Ad-spend-only CAC = 9,000 / 250 = 36.00. Ad spend is 45% of the total, so this figure leaves out 44.00 per customer.
- 120 of the 250 came from paid channels. Paid CAC = 9,000 / 120 = 75.00.
One month, three answers: 36.00, 75.00 and 80.00. None is wrong, but only the last is what a customer cost the business.
A second example: a business with a sales team
Where people do the selling, ad spend is a small part of CAC. Take one quarter: 6,000 of ad spend, 30,000 of salaries and commissions, 4,500 of agency fees, 1,500 of tools, 3,000 of content and 5,000 of events. Again, these are illustrations, not benchmarks.
- Total cost: 50,000. New customers in the quarter: 20.
- Fully loaded CAC = 50,000 / 20 = 2,500.00.
- Ad-spend-only CAC = 6,000 / 20 = 300.00. Ad spend is 12% of the total.
- A customer pays 500 a month at a 60% gross margin, which is 300.00 of gross profit a month. Payback = 2,500.00 / 300.00 = 8.3 months.
Judged on ad spend alone, this business would think a customer costs 300.00. The real figure is 2,500.00.
Blended CAC vs paid CAC
Blended CAC divides cost by every new customer, whichever channel they came through. Paid CAC divides ad spend by the customers paid channels won. Blended CAC answers what a customer costs the business. Paid CAC answers what a customer from ads costs. The two differ whenever some customers arrive without a paid click.
| Figure | Cost counted | Divided by | Worked example | Use it for |
|---|---|---|---|---|
| Fully loaded CAC (blended) | Every sales and marketing cost | All new customers | 20,000 / 250 = 80.00 | Budgets, pricing and the payback period |
| Ad-spend-only CAC | Ad spend | All new customers | 9,000 / 250 = 36.00 | Little on its own: it leaves costs out and credits ads with every customer |
| Paid CAC | Ad spend | New customers from paid channels | 9,000 / 120 = 75.00 | What a customer from ads costs, before the team behind them |
The ad-spend-only figure is the one to distrust. In the example, 130 of the 250 new customers came through search, referrals or word of mouth. Spreading ad spend over them makes the ads look as if they win a customer for 36.00, when a customer from ads costs 75.00 before any salary or fee is counted.
Watch blended CAC when you plan budgets, and paid CAC when you decide whether to spend more on ads. If blended CAC holds steady while paid CAC climbs, unpaid channels are carrying the average, and extra ad spend buys customers at the paid figure, not the blended one.
The words are not used the same way everywhere. Some finance guides for subscription software use blended CAC for a figure that also counts sales to existing customers, and new CAC for first-time customers only. Check which meaning a report uses before you compare two numbers.
What is the CAC payback period?
The CAC payback period is the number of months a new customer takes to earn back what they cost to win. It is CAC divided by the gross profit that customer brings in per month. With a CAC of 80.00 and 20.00 of gross profit a month, payback is 80.00 / 20.00 = 4 months.
CAC payback in months = CAC / (revenue per customer per month * gross margin)The monthly figure in the example is 40 of revenue × 0.50 = 20.00. Which CAC you put on top of the fraction changes the answer:
| Figure | CAC | Payback (months) | Against a 3-month limit (60.00) |
|---|---|---|---|
| Ad-spend-only CAC | 36.00 | 1.8 | 24.00 under |
| Paid CAC | 75.00 | 3.8 | 15.00 over |
| Fully loaded CAC | 80.00 | 4 | 20.00 over |
On ad spend alone the customer looks paid back in 1.8 months. Fully loaded, it takes 4.
What the payback sum assumes
- Gross profit, not revenue. The cost of the product or the service is paid first. Only what is left can pay back the marketing.
- The customer stays. Someone who leaves in month two never pays back a CAC that needs four.
- An even flow. A subscription earns month by month. A store earns the first order on day one and the rest in lumps, so a monthly figure is an average.
What is a good CAC?
A good CAC is one below the gross profit a customer brings in over the time you can afford to wait for it. That limit comes from your own numbers: gross profit per customer per month, multiplied by the months your cash can stay tied up. Any CAC under the limit is paid back in time, and any CAC over it is not.
most you can pay for a customer = gross profit per customer per month * months you can waitIn the example, a customer brings in 20.00 a month and the business can wait 3 months, so the limit is 20.00 × 3 = 60.00. The fully loaded CAC of 80.00 is 20.00 over it. Either CAC has to come down, or the business has to fund a longer wait.
That is why this page prints no average CAC by industry. A figure averaged across businesses with different prices, margins and sales cycles cannot say what your own customer can cost. Your gross profit and your cash position can.
How does CAC compare with lifetime value?
The LTV to CAC ratio divides the gross profit a customer brings in over the whole relationship by what they cost to win. With a lifetime value of 360.00 and a CAC of 80.00, the ratio is 360.00 / 80.00 = 4.50: a customer leaves 280.00 after their acquisition cost, before overheads. Below 1, every new customer loses money.
The ratio and the payback period answer different questions. The same example has a ratio well above 1 and a payback longer than the business can wait: profitable in the end, short of cash on the way. Many guides quote one fixed ratio or one fixed payback as the target for every company. Those figures are conventions from subscription software investing, not rules. The customer lifetime value calculator works out the lifetime value to use here and traces where the usual ratio comes from.
How does conversion rate lower CAC?
Conversion rate lowers CAC without touching spend. CAC is cost divided by new customers, and new customers are visitors multiplied by the share who buy. When more of the same visitors become customers, the same cost is divided by a larger number. Conversion rate is the one part of that sum the ad budget does not set.
CAC = total cost / (visitors * conversion rate)The default example again: 20,000 of cost and 10,000 visitors in the month, with 2.50% of them becoming customers. Cost and visitors stay the same in every row. All figures are illustrations of the arithmetic.
| Conversion rate | New customers | CAC | Payback (months) | Against the 60.00 limit |
|---|---|---|---|---|
| 2.00% | 200 | 100.00 | 5 | 40.00 over |
| 2.50% (today) | 250 | 80.00 | 4 | 20.00 over |
| 3.00% | 300 | 66.67 | 3.3 | 6.67 over |
| 3.50% | 350 | 57.14 | 2.9 | 2.86 under |
| 4.00% | 400 | 50.00 | 2.5 | 10.00 under |
Converting 3.00% of visitors instead of 2.50%, a rate 20% higher, takes CAC from 80.00 to 66.67, a drop of 16.7%, and payback from 4 months to 3.3. To reach the same CAC by cutting cost, 3,333.33 would have to come out of the budget without losing a single customer. To get under the 60.00 limit, the rate has to reach 3.33%.
To find your own rate, use the conversion rate calculator. To put a value on a lift before you pay for the work, the ROI calculator turns your traffic, order value and a lift you choose into a return. To find what holds the rate down, the guide on how to optimize landing pages goes through the page, and Convertica's free CRO audit checks the page your traffic lands on.
More customers from the same traffic, in a real test
In Convertica's A/B test for dScryb, a membership store, traffic was split equally between the original search results page and a version with call-to-action buttons and clearer access levels. The test measured paid membership sign-ups, not CAC. But sign-ups from the same visitors are the bottom of the CAC fraction: more of them for the same cost is a lower cost for each.
+49.4%
Paid membership sign-ups, 17-day A/B test
Source: dScryb, paid membership sign-ups, 17-day A/B test, 98% confidence
Other ways to lower CAC
- Stop paying for customers you do not get. Find the campaigns whose spend wins nobody and move it. That needs every campaign link tagged, which the UTM generator does.
- Grow the channels with no media cost. Search, referrals and email add customers to the bottom of the fraction. They still cost salaries and fees, which is what the cost lines are for.
- Shorten the sale. Where people sell, every week a deal stays open adds salary to CAC.
How to calculate CAC in Excel or Google Sheets
To calculate CAC in Excel or Google Sheets, put each cost on its own row, total them, and divide by new customers. With the six cost lines in B2 to B7, the total is =SUM(B2:B7) and CAC is the total divided by the cell that holds new customers. The same formulas work in both programs.
| Cell | What it holds | Type or formula | Example |
|---|---|---|---|
| B2 | Ad spend | Typed in | 9,000 |
| B3 | Salaries and commissions | Typed in | 6,500 |
| B4 | Agency and freelancer fees | Typed in | 2,500 |
| B5 | Tools and software | Typed in | 600 |
| B6 | Content and creative | Typed in | 1,400 |
| B7 | Other costs | Typed in | 0 |
| B8 | Total cost | =SUM(B2:B7) | 20,000 |
| B9 | New customers | Typed in | 250 |
| B10 | Fully loaded CAC | =IF(B9=0,"",B8/B9) | 80.00 |
| B11 | New customers from paid channels | Typed in | 120 |
| B12 | Paid CAC | =IF(B11=0,"",B2/B11) | 75.00 |
| B13 | Revenue per customer per month | Typed in | 40 |
| B14 | Gross margin | Typed in as a percentage | 50% |
| B15 | CAC payback in months | =IF(OR(B10="",B13*B14=0),"",B10/(B13*B14)) | 4 |
| B16 | Lifetime value per customer | Typed in | 360.00 |
| B17 | LTV to CAC ratio | =IF(OR(B10="",B10=0),"",B16/B10) | 4.50 |
Each IF leaves the cell empty where the formula has no answer, at zero customers or zero gross profit, in place of a divide-by-zero error. Keep one column per month and the row of CAC figures becomes a trend you can read.
Common CAC mistakes
The most common CAC mistake is counting ad spend and nothing else. In the example on this page that turns a CAC of 80.00 into 36.00, and a payback of 4 months into 1.8. The others are quieter:
- Returning customers counted as new. Repeat buyers in the count make CAC look lower than it is. Count first-time paying customers only.
- Leads counted as customers. A sign-up or a trial is not a customer until they pay. Dividing by leads gives a cost per lead.
- Spend and customers from different months. When a sale takes weeks to close, this month's spend wins next month's customers. Match the cost to the customers it won.
- Mixed periods. A quarter of salaries divided by a month of customers, or the reverse.
- One blended number. A healthy average can hide a paid channel that costs far more per customer. Look at paid CAC as well.
- Revenue in the payback sum. Payback on revenue ignores what the product costs to supply. Use gross profit.
- Reading a small month. With a handful of new customers, one more or one fewer moves CAC a long way. Use a longer period before you act on it.
Related calculators
CAC is one side of the sum. These calculators work out the numbers it is compared with.
See all free tools and how they fit together.
CAC calculator questions
What does a CAC calculator do?
A CAC calculator adds up the sales and marketing cost for a period and divides it by the new customers won in that period. This one takes the cost line by line, shows the ad-spend-only and paid figures beside the fully loaded one, and works out how many months the cost takes to earn back.
What is the CAC formula?
CAC = total sales and marketing cost / new customers, for the same period. For example, 20,000 of cost that wins 250 new customers is a CAC of 20,000 / 250 = 80.00. The cost is every line it took to win them, not ad spend alone.
What costs should be included in CAC?
Include every cost of winning new customers: ad spend, salaries and commissions for sales and marketing, agency and freelancer fees, tools and software, content and creative, and anything else spent to win the sale, such as events or first-order discounts. Leave out the cost of serving existing customers and the cost of the product itself.
What is the difference between blended CAC and paid CAC?
Blended CAC divides cost by all new customers, whichever channel they came through. Paid CAC divides ad spend by the customers paid channels won. In the example on this page, 9,000 of ad spend is 36.00 per customer across all 250 new customers and 75.00 across the 120 who came from ads.
Is CAC the same as CPA?
No. CAC (customer acquisition cost) divides all sales and marketing cost by new paying customers, for the whole business. CPA (cost per acquisition) divides one campaign's or channel's cost by whatever conversion you chose to count, which may be a lead or a sign-up and not a customer. CAC is usually the higher and broader figure.
What is a good CAC?
A good CAC is one below the gross profit a customer brings in over the time you can afford to wait for it. A customer who brings in 20.00 of gross profit a month covers 60.00 in 3 months, so a business that can wait 3 months can pay up to 60.00. No single figure fits every business.
What is the CAC payback period?
The CAC payback period is the number of months a new customer takes to earn back what they cost to win: CAC divided by gross profit per customer per month. A CAC of 80.00 against 20.00 of monthly gross profit pays back in 4 months. Use gross profit, not revenue.
How does conversion rate affect CAC?
A higher conversion rate lowers CAC, because the same cost is divided by more customers. In the example on this page, 20,000 of cost and 10,000 visitors give a CAC of 80.00 at a 2.50% conversion rate and 66.67 at 3.00%, with no change in spend.
How do I calculate CAC in Excel or Google Sheets?
Put each cost on its own row, for example in cells B2 to B7, total them with =SUM(B2:B7) in B8, and put new customers in B9. CAC is =IF(B9=0,"",B8/B9). The IF leaves the cell empty when there are no new customers, in place of a divide-by-zero error.
What is CAC when there are no new customers?
CAC is not defined when there are no new customers, because there is nobody to divide the cost by. It is not zero, and a spreadsheet will show a divide-by-zero error. The money was still spent, so use a longer period, or match the spend to the later month in which its customers arrived.
Should I calculate CAC monthly or quarterly?
Use the period that matches how long a sale takes. If most customers buy within days of the first visit, a month works. If a sale takes weeks or months to close, a month's spend wins a later month's customers, so use a quarter or match each month's cost to the customers it produced.
Is this a CAC score calculator?
No. This page calculates customer acquisition cost, the business meaning of CAC. In medicine, CAC stands for coronary artery calcium, and a CAC score comes from a CT scan of the heart. The two share an abbreviation and nothing else.