CAC Calculator

What is CAC?

Customer Acquisition Cost (CAC) measures how much you spend on marketing and advertising to acquire one new customer. It's a crucial metric for understanding the efficiency of your marketing efforts and determining if your customer acquisition strategy is sustainable.

How to Calculate CAC

Example Calculation

If you spend $5,000 on ads and acquire 100 new customers:

• Total Ad Spend: $5,000
• Number of Customers: 100
• CAC: $5,000 / 100 = $50

This means it costs you $50 to acquire each new customer through your advertising efforts.

What is a Good CAC?

A good CAC varies significantly by industry and business model:

• Below $10: Excellent - very efficient acquisition
• $10 - $50: Good - healthy acquisition cost
• $50 - $100: Moderate - acceptable for many businesses
• Above $100: High - consider optimizing your marketing strategy

CAC vs LTV

CAC should always be compared against Lifetime Value (LTV). A healthy business typically has LTV:CAC ratio of 3:1 or higher. If your CAC is higher than your LTV, you're losing money on each customer over their lifetime.

Tips to Lower CAC

• Improve targeting: Focus on high-intent audiences likely to convert
• Optimize ad creative: Test different ad formats and messaging
• Refine landing pages: Improve conversion rates with better UX
• Use retargeting: Re-engage interested users
• Analyze channels: Focus on best-performing platforms