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Customer Acquisition Cost Calculator

Fully-loaded acquisition spend divided by customers acquired, with payback period and the LTV ratio that decide whether it is affordable. The definition argument is what counts as fully loaded: salaries and tooling belong in it, and leaving them out flatters the number.

Also called: customer acquisition cost calculator, cost per customer.

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Customer acquisition cost
$2,000.00

It costs $2,000.00 to acquire a customer. Enter revenue per customer to see how long the spend takes to repay. Enter a churn rate to see lifetime value and whether the spend is recoverable. No organic customers separated, so blended and paid CAC are the same figure here.

Paid CAC, excluding organic
$2,000.00
Blended CAC
$2,000.00
Months to repay the acquisition cost
0
Lifetime value
$0.00
LTV to CAC
0
Monthly gross profit per customer
$0.00
Most you can afford to spend
$0.00
On payback
Enter revenue per customer to see how long the spend takes to repay.
On lifetime value
Enter a churn rate to see lifetime value and whether the spend is recoverable.
On blended against paid
No organic customers separated, so blended and paid CAC are the same figure here.
How this is calculated
Method and background

How this is calculated

Total sales and marketing cost for a period over the customers that period produced. The honest version includes salaries, commissions, tooling and overhead, not just ad spend, and excluding people is the most common way this gets quoted at half its real value. Three optional inputs turn the figure into a decision. Separating organic customers gives paid CAC, which is what the next marketing rupee actually buys, where blended CAC uses free customers to flatter the paid ones. Revenue and margin give the payback period, which is the cash flow constraint. And churn gives lifetime value, which is what says whether the spend is recoverable at all.

the division is the easy part; payback and the LTV ratio are what decide whether the number is acceptable
S&M
Fully-loaded sales and marketing spend (currency)
m
Gross margin

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

2,000 per customer

Sales and marketing spend in the period
$500,000.00
New customers acquired
250
Of those, acquired without spend
0
Monthly revenue per customer
$0.00
Gross margin
75%
Monthly churn
0%

Customer acquisition cost$2,000.00

arithmetic identity

Open this example

organic customers flatter the blended figure

Sales and marketing spend in the period
$500,000.00
New customers acquired
250
Of those, acquired without spend
100
Monthly revenue per customer
$400.00
Gross margin
75%
Monthly churn
2%

Customer acquisition cost$2,000.00

boundary: 500,000 over the 150 customers the spend actually bought

Open this example

Method and limits

What it assumes

  • Spend and customers measured over the same period, with no acquisition lag.

What it deliberately does not model

  • Long sales cycles mean this period customers came from last period spend, which distorts both.
  • Blended CAC falls as organic grows even when paid acquisition gets worse.
  • Lifetime value from a constant churn rate overstates, because real churn curves flatten.

Formula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator

Frequently asked questions

What counts as fully loaded?
Salaries, commissions, tooling and overhead as well as ad spend. Quoting CAC on media cost alone typically halves it and is the most common way the number is misstated.
Should I use blended or paid CAC?
Paid, for deciding whether to spend more, since that is what the next rupee buys. Blended is useful for reporting overall efficiency and misleading for a spending decision.
What payback period is acceptable?
Under twelve months for most subscription businesses, because the cash has to be funded until it returns. Beyond eighteen months growth consumes cash faster than it generates it.