Business
Customer Acquisition Cost Calculator
Works customer acquisition cost, where what goes in the numerator is the argument.
Result
Counts every customer won in the period against that period's spend. Where your sales cycle is long, compare a quarter rather than a month or the figure lags badly.
Get a Free Business AuditHow the calculation works
Sales and marketing costs for a period divided by the new customers acquired in it. The numerator should include the people as well as the media, since sales salaries and the time spent on opportunities that did not close are a real part of what acquisition costs.
What moves the number
- Whether sales salaries and time are included.
- Media and marketing spend.
- Which customers count as newly acquired.
- Timing mismatch between spend and acquisition.
Where this one goes wrong
Excluding sales labour produces a flattering figure that bears no relation to what winning a customer actually costs, and in businesses with a sales function that labour is usually the larger part. Include it. The timing mismatch is the other issue, since spend in one month produces customers in the next, and a monthly figure in a growing business is distorted by that lag in a way a rolling period is not.
Before you quote
- Include sales labour, not just media spend.
- Use a rolling period to smooth the spend-to-acquisition lag.
- Define clearly which customers count as new.
Questions
About this calculator
What should be in acquisition cost?
Media and marketing spend plus the sales labour, including time spent on opportunities that did not close. In businesses with a sales function that labour is usually the larger part, and excluding it produces a figure unrelated to reality.
Why is my monthly figure so volatile?
Because spend in one month produces customers in the next, and in a growing business that lag distorts any single month. A rolling period smooths it and gives a figure that can actually be trended.
Should acquisition cost be measured by channel?
Yes, since the blended figure averages channels that perform very differently and tells you nothing about where to spend. The per-channel figures are what change decisions, and they frequently rank channels in a surprising order.
The formula
CAC = (marketing + sales cost) ÷ new customers
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How to use this calculator
- Marketing spend ($). Enter your own figure; the page starts at $12,000.
- Sales and admin cost ($). Wages and time spent quoting, answering and chasing.
- New customers won. Enter your own figure; the page starts at 60.
- Customer lifetime value ($). Enter your own figure; the page starts at $2,400.
The result updates as you type, so you can try a figure, see what it does to cost to acquire one customer, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Marketing spend | $12,000 |
| Sales and admin cost | $6,000 |
| New customers won | 60 |
| Customer lifetime value | $2,400 |
What comes out
| Result | Value |
|---|---|
| Cost to acquire one customer main result | $300.00 |
| LTV to CAC ratio | 8.0× |
| Total acquisition spend | $18,000 |
| Lifetime value less CAC | $2,100 |
CAC of $300.00 against 2,400 lifetime value is a ratio of 8.0×, healthy territory.
How sensitive the answer is
Holding everything else steady and changing only marketing spend, this is what happens to cost to acquire one customer. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Marketing spend ($) | Cost to acquire one customer |
|---|---|
| $6,000 | $200.00 |
| $9,000 | $250.00 |
| $12,000 example above | $300.00 |
| $18,000 | $400.00 |
| $24,000 | $500.00 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Marketing spend ($)
- A money amount, starting at $12,000.
- Sales and admin cost ($)
- Wages and time spent quoting, answering and chasing.
- New customers won
- A number, between 0 and 1000000, starting at 60.
- Customer lifetime value ($)
- A money amount, starting at $2,400.
What the results tell you
| Result | What it is |
|---|---|
| Cost to acquire one customer | The headline result. A money figure. |
| LTV to CAC ratio | A number. |
| Total acquisition spend | A money figure. |
| Lifetime value less CAC | A money figure. |
Where these figures usually mislead
Business calculations assume the inputs are steady. Seasonality, a few large customers, and slow payment all break that assumption. A figure that looks healthy annually can still leave you short in a given month.
Keep going
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