Customer Acquisition Cost (CAC) Calculator

Customer acquisition cost (CAC) calculator for sales and marketing spend

Customer acquisition cost (CAC) tells you how much you spend to win one new customer. It is one of the fastest ways to sanity-check whether your growth is healthy or quietly draining cash. If you spend R75,000 (or $75,000) on sales and marketing and you acquire 25 new customers in that same period, your CAC is 75,000 ÷ 25 = 3,000 per customer.

This CAC calculator is built for real-world use, not perfect spreadsheets. If you only know a single headline number, you can enter total spend and new customers and get a clean result in seconds. If you want a more credible CAC, switch to itemised costs and enter the pieces you do know (ads, salaries, tools, agency, other). Anything you leave blank is treated as zero so you still get a result, but you will also see what assumptions that creates.

CAC is most useful when you compare it to what a customer is worth. That is why this calculator also supports optional LTV inputs. If you enter average revenue per customer per month, gross margin %, and an average customer lifetime (months), the calculator estimates gross-profit LTV and your LTV:CAC ratio. You do not need these to compute CAC, but they turn a raw number into a decision tool: if your LTV:CAC ratio is weak, you can either cut CAC, raise margin, increase retention, or increase revenue per customer.

Assumptions and how to use this calculator

• Same-period matching: Costs and “new customers” should come from the same period. Mixing costs from one month with customers from another makes CAC meaningless.
• What counts as “new customer”: The calculator assumes a customer is acquired once. If you count reactivations or upgrades as “new,” your CAC will be understated or overstated depending on your definition.
• Itemised costs are partial by default: In itemised mode, any field left blank is treated as 0, which usually understates true CAC unless you include all major acquisition costs.
• LTV is gross-profit based: Optional LTV uses revenue × gross margin × lifetime. It is not net profit and does not include overhead, refunds, or working capital effects.
• Average-based estimates: CAC and LTV are averages. If you have multiple channels with different performance, consider calculating CAC per channel separately for better decisions.

Common questions

What costs should be included in CAC?

Include costs that exist mainly to acquire customers in the period you are measuring. Paid ads, sales and marketing payroll (or a portion of it), agency fees, marketing software, and campaign production are common. If you exclude a major cost category, CAC looks better than reality. If you include costs that are not acquisition-related (for example long-term brand work or product development), CAC can look worse than reality. The key is consistency: include the same types of costs every time you measure.

Should I include salaries in CAC?

If you have dedicated sales or marketing staff, salaries are usually part of acquisition cost because they exist to create pipeline and win customers. If a role is split across acquisition and retention, allocate a reasonable portion rather than forcing precision. Excluding salaries often makes CAC look artificially low, especially in B2B where labour is a large part of acquisition.

Why does my CAC look “too high” in short periods?

CAC can spike in short periods because spend happens before customers arrive. A campaign may incur costs this month but conversions land next month. If that is your reality, measure over a longer window (quarterly) or use the same window for both costs and customers. You can also calculate a rolling CAC (last 90 days) to reduce timing noise.

What is a “good” LTV:CAC ratio?

There is no universal threshold because industries and cash cycles differ. A higher ratio is generally better, but it must be interpreted with payback time and risk. A business with high retention and strong gross margins can tolerate higher CAC. If your ratio is low, the levers are simple: reduce acquisition spend, improve conversion rate, increase prices, improve margin, or increase retention. The optional LTV section here is a starting estimate, not a substitute for cohort analysis.

What if I do not know customer lifetime or margin?

Leave those fields blank and use CAC alone. If you want an estimate, start with rough but defensible numbers: gross margin % from your financial statements, and lifetime from churn or renewal history. Even a rough LTV estimate is useful if you keep the method consistent over time. When you later refine your inputs, compare trends rather than obsessing over one “perfect” CAC number.