Customer Acquisition Cost Calculator

What is Customer Acquisition Cost?

Customer Acquisition Cost (CAC) is the total cost associated with acquiring a new customer, including marketing and sales expenses.

CAC Calculation

• Formula: Total Cost of Sales and Marketing / Number of New Customers Acquired
• Example: $10,000 spent on marketing and sales, acquiring 100 new customers
  • $10,000 / 100 = $100 CAC

Key Points

• Critical metric for assessing marketing efficiency and profitability
• Varies by industry, business model, and growth stage
• Should be compared to Customer Lifetime Value (CLV) for context
• Influenced by marketing strategies, sales processes, and market conditions
• Can be reduced through improved targeting, conversion optimization, and retention strategies

Why CAC Matters

• Helps determine the efficiency of marketing and sales efforts
• Crucial for assessing business sustainability and profitability
• Guides decisions on budget allocation and growth strategies
• Indicates the payback period for customer acquisition investments

Using CAC

• Benchmark against industry standards and competitors
• Track changes over time to assess marketing efficiency
• Compare CAC across different marketing channels and campaigns
• Use alongside CLV to ensure profitable customer relationships
• Inform pricing strategies and customer retention efforts