CAC Calculator
Calculate customer acquisition cost and marketing ROI
Results are estimates and may not reflect your actual financial situation. This is not financial, tax, or legal advice. Consult a qualified professional.
How to use
Enter your total sales and marketing spend for a period and the number of new customers acquired during that same period. Optionally add your Customer Lifetime Value (LTV) and monthly ARPU to see the LTV:CAC ratio and payback period. If you track leads, enter total leads generated to see cost per lead and lead-to-customer conversion rate.
Formula
Examples
SaaS startup
Spent $50,000 on marketing last quarter and acquired 200 new customers. CAC is $250. With an LTV of $1,200 and monthly ARPU of $80, the LTV:CAC ratio is 4.8x (healthy) with a 3.1-month payback period.
E-commerce brand
Spent $15,000 on ads and acquired 500 customers. CAC is $30. From 10,000 total leads, cost per lead is $1.50 with a 5% lead-to-customer conversion rate. With an average order value LTV of $120, the LTV:CAC ratio is 4x.
B2B company
Spent $200,000 on sales team and marketing and closed 40 enterprise deals. CAC is $5,000. With an LTV of $25,000, the LTV:CAC ratio is 5x (healthy) but with ARPU of $1,500/month, payback takes 3.3 months.
Frequently asked questions
What is a good CAC?
There is no universal "good" CAC since it varies by industry and business model. What matters is the LTV:CAC ratio. A ratio of 3:1 or higher is generally considered healthy, meaning you earn at least $3 for every $1 spent acquiring a customer. Below 1:1 means you are losing money on each customer.
What costs should I include in CAC?
Include all costs directly tied to customer acquisition: paid advertising, marketing team salaries, sales team salaries and commissions, marketing software and tools, content production, events, and any agency fees. Do not include general overhead, product development, or customer support costs.
What is a healthy LTV:CAC ratio?
An LTV:CAC ratio of 3:1 or higher is considered healthy for most businesses. Below 1:1 means you lose money on each customer. Between 1:1 and 3:1 is acceptable but indicates room for improvement. Above 5:1 may suggest you are under-investing in growth and could acquire customers faster.
How do I reduce my CAC?
Common strategies include improving your conversion funnel (more customers from the same spend), focusing on higher-converting channels, building organic acquisition channels (SEO, referrals, word of mouth), reducing sales cycle length, and improving targeting to reach higher-quality leads.
What is CAC payback period?
CAC payback period is how many months it takes for a customer to generate enough revenue to cover their acquisition cost. It is calculated as CAC divided by monthly ARPU. A shorter payback period means you recover your investment faster and can reinvest in growth sooner. Under 12 months is ideal for SaaS businesses.
About this tool
Calculate your Customer Acquisition Cost (CAC), LTV:CAC ratio, and payback period. Understand your unit economics and marketing efficiency.
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