About this tool
The CAC Calculator adds up what you spent on sales and marketing in a period and divides it by the new customers won in that period to give customer acquisition cost. It then puts that cost in context: a lifetime value built from purchase value, purchase frequency, customer lifetime, and gross margin; the LTV to CAC ratio with the usual rules of thumb; and the number of months of gross profit it takes to earn the acquisition cost back. It is for founders and finance teams checking whether growth spending is sustainable, for marketers who need to separate a blended CAC across all channels from the CAC of paid campaigns alone, and for anyone preparing the unit-economics slide of an investor deck. A sensitivity table shows how the ratio, payback, and verdict change as CAC rises or falls.
How it works
CAC = (sales costs + marketing costs) ÷ new customers acquired in the same period. Paid CAC uses only paid media spend and only customers attributed to paid campaigns. LTV = average purchase value × purchases per year × customer lifetime in years × gross margin, which is the gross profit a customer generates before acquisition cost. LTV:CAC = LTV ÷ CAC; readings under 1 mean each customer costs more than they ever return, 1 to 3 is thin, and 3 or more is the commonly quoted healthy range, with very high ratios suggesting under-investment in growth. Payback months = CAC ÷ monthly gross profit per customer, where monthly gross profit = purchase value × purchases per year × margin ÷ 12. Currency symbols are display only.
Frequently asked questions
What costs belong in CAC?
Everything spent to win new customers in the period: paid media, agency and tool fees, content and creative production, sales salaries and commissions, and the marketing team's payroll. Include costs that serve existing customers only if you cannot separate them; a fully loaded CAC is more honest than one built from ad spend alone, which is why it usually comes out well above the CPA an ad platform reports.
What is a good LTV to CAC ratio?
The rule of thumb most investors quote is 3:1 or better: each customer should return at least three times what they cost to acquire. Below 1:1 you lose money on every customer; between 1 and 3 the business works only if the customer lifetime assumption holds. A ratio far above 5:1 is not automatically good either; it can mean you are spending too little on growth.
What is the difference between blended and paid CAC?
Blended CAC divides all sales and marketing cost by all new customers, including those who arrived through referrals, organic search, or word of mouth. Paid CAC divides paid media spend by the customers attributed to those campaigns. Blended is the number that matters for the business as a whole; paid CAC is the one to compare against a campaign's target, and it is usually higher.
Why does CAC payback matter if LTV:CAC is fine?
Because lifetime value arrives over years while acquisition cost is paid today. A 3.6:1 ratio built on a three-year lifetime still means ten months of gross profit before a customer has repaid their own acquisition, and during that time the cash is gone. Payback under 12 months is typical for healthy subscription and e-commerce businesses; longer paybacks need patient capital.