How to use the customer acquisition cost calculator
- Choose the period (month, quarter or year) and list every sales and marketing cost for it.
- Enter the number of new customers acquired in the same period.
- Enter the monthly revenue per customer and your gross margin to see the payback period.
- Review the CAC, the payback months and how the spend breaks down.
Worked example
$10,000 of sales and marketing costs, 50 new customers, $100 monthly revenue at 40% margin
Blended CAC is $10,000 ÷ 50 = $200. Each customer brings $40 of gross margin a month, so the acquisition cost is paid back in 5 months.
How it works
Blended CAC = total sales and marketing costs ÷ new customers acquired in the same period. Monthly gross margin per customer = monthly revenue per customer × gross margin. CAC payback (months) = CAC ÷ monthly gross margin per customer.
Assumptions
- Costs and customers come from the same period; a lag between spend and sign-ups is not modelled.
- Blended CAC includes customers from all channels, including organic and referrals.
- Revenue per customer and margin are your own figures.
Frequently asked questions
What should be included in CAC?
Everything spent to win new customers: ad spend, marketing and sales salaries and commissions, agencies, tools, events and content. Excluding salaries makes CAC look lower than it really is.
What is the difference between blended and paid CAC?
Blended CAC divides all acquisition costs by all new customers. Paid CAC divides paid media costs by customers from paid channels only, and is usually higher.
What is a good CAC payback period?
Shorter is better for cash flow. What is acceptable depends on retention: a long payback only works if customers stay well beyond it.
Limitations
- Does not split CAC by channel or cohort.
- Payback ignores churn during the payback period.