Customer Acquisition Cost Calculator

Calculate your customer acquisition cost (CAC), blended CAC, channel-level acquisition cost, CAC payback and LTV:CAC ratio. Understand how much you spend to acquire each new customer.

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Optional: Customer Lifetime Value
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Customer Acquisition Cost Formula

Total Acquisition Cost = Advertising & Marketing Spend + Sales Spend + Other Acquisition Costs CAC = Total Acquisition Cost / New Customers Acquired LTV:CAC Ratio = Customer Lifetime Value / CAC CAC Payback (months) = CAC / Monthly Gross Profit per Customer If monthly gross profit is not provided: Monthly Gross Profit = LTV × Gross Margin / Customer Lifetime

The standard blended CAC calculation divides acquisition-related sales and marketing costs by the number of new customers acquired during the same measurement period. Businesses may define which costs are attributable to acquisition differently, so use a consistent methodology when comparing periods or channels.

How to Use the Customer Acquisition Cost Calculator

1

Enter Acquisition Spend

Add advertising and marketing costs, sales spend and any other directly attributable acquisition costs for the same period.

2

Enter New Customers

Enter the number of new customers acquired during that period.

3

Add LTV if Available

Enter customer lifetime value and gross margin to compare acquisition economics with customer value.

4

Click Calculate CAC

View total acquisition spend, blended CAC, LTV:CAC ratio, estimated gross-profit payback and acquisition efficiency.

Example Calculation

₹7,50,000 acquisition spend for 100 new customers

Given:

  • Advertising & marketing = ₹5,00,000
  • Sales spend = ₹2,00,000
  • Other acquisition costs = ₹50,000
  • New customers = 100

Total acquisition cost: ₹7,50,000

CAC: ₹7,50,000 ÷ 100 = ₹7,500 per customer

Customer Acquisition Cost: ₹7,500

If LTV is ₹30,000, the LTV:CAC ratio is 4:1.

Understanding the Results

Blended CAC

The average acquisition cost across the acquisition activities included in your calculation. Lower CAC generally means you are acquiring customers more efficiently, but CAC should be assessed alongside retention, margin and customer value.

LTV:CAC Ratio

Compares customer lifetime value with acquisition cost. A 3:1 ratio means each ₹1 of acquisition cost is associated with ₹3 of customer lifetime value.

CAC Payback

Shows approximately how long it takes to recover acquisition cost through gross profit. Shorter payback generally improves cash-flow efficiency.

Important Note

CAC is highly dependent on how a business defines acquisition costs and customers. Use the same cost categories, customer definition and time period when comparing CAC over time.

Key Definitions

CAC

Customer Acquisition Cost — the average acquisition spend required to gain one new customer.

Blended CAC

Average CAC across multiple acquisition channels or campaigns included in the same calculation.

LTV

Customer Lifetime Value — estimated value or gross profit generated by a customer over the relationship.

LTV:CAC

A unit-economics ratio comparing customer lifetime value with customer acquisition cost.

Acquisition Spend

Marketing, sales and other costs that a business includes in its customer acquisition measurement.

CAC Payback

The approximate time required to recover CAC through gross profit from the acquired customer.

Frequently Asked Questions

Customer Acquisition Cost (CAC) is the average amount a business spends to acquire one new customer. A common blended formula is total acquisition spend divided by new customers acquired.
Add the acquisition costs included in your reporting period, then divide the total by the number of new customers acquired during the same period.
Depending on your methodology, CAC can include advertising, sales and marketing salaries, commissions, agencies, software, events and other directly attributable acquisition costs. Consistency is important when comparing periods.
There is no universal target. CAC should be evaluated against gross margin, retention, customer lifetime value, payback period and cash-flow requirements.
It means estimated customer lifetime value is three times the acquisition cost. For example, ₹30,000 LTV and ₹10,000 CAC gives an LTV:CAC ratio of 3:1.

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