Customer Acquisition Cost Calculator

Use this customer acquisition cost calculator to calculate how much it costs to acquire each new customer. Enter your total marketing and sales spend and the number of customers gained to get your CAC instantly.

Customer acquisition cost, often shortened to CAC, is one of the most important metrics for marketers, founders and business owners. It helps you understand whether your growth strategy is efficient and sustainable.

What is customer acquisition cost?

Customer acquisition cost (CAC) is the average amount you spend to acquire one new customer.

This usually includes the combined cost of:

• paid advertising
• marketing tools
• agency or freelancer costs
• sales salaries or commissions
• software used for lead generation and conversion
• other acquisition-related expenses

Customer acquisition cost formula

CAC = Total marketing and sales spend ÷ New customers acquired

For example, if you spend £5,000 on marketing and sales and gain 125 new customers, your CAC is:

£5,000 ÷ 125 = £40

That means your customer acquisition cost is £40 per customer.

How to use this CAC calculator

1. Enter your total marketing and sales spend.
2. Enter the number of new customers acquired.
3. The calculator updates instantly and shows:
   • your customer acquisition cost
   • spend per 100 customers
   • customers acquired per £1,000 of spend

Use the Reset button to clear the inputs and start again.

Why CAC matters

Customer acquisition cost is a core profitability metric. It helps you answer questions such as:

• Are my campaigns cost-effective?
• Is my sales process too expensive?
• Can my business scale profitably?
• Is my acquisition cost lower than customer value?

A lower CAC generally means your business is acquiring customers more efficiently. A high CAC can indicate problems with targeting, conversion rate, sales efficiency or channel performance.

Example CAC calculations

Example 1: Small business campaign

A company spends £2,400 and acquires 60 customers.

CAC = £2,400 ÷ 60 = £40

Example 2: SaaS lead generation

A software business spends £12,000 across ads, content and outbound sales, and signs 80 new customers.

CAC = £12,000 ÷ 80 = £150

Example 3: E-commerce promotion

An online shop spends £3,750 and gains 150 customers.

CAC = £3,750 ÷ 150 = £25

What should be included in CAC?

This depends on how detailed you want your reporting to be. Many businesses include:

• advertising spend
• creative production costs
• agency fees
• sales team costs
• CRM and marketing software
• lead generation costs

Some companies calculate a basic media-only CAC, while others use a fuller blended CAC that includes all acquisition-related costs.

CAC vs CPA

CAC and CPA are related, but they are not always the same:

• CAC measures the cost to acquire an actual customer
• CPA often measures the cost of a specific action, such as a lead, sign-up or purchase

If every conversion becomes a customer, the numbers may look similar. In many funnels, however, CPA is lower than CAC because not every lead converts into a paying customer.

CAC and lifetime value

CAC is most useful when compared with customer lifetime value (LTV). If it costs too much to acquire a customer relative to the revenue or profit they generate, growth may not be sustainable.

For example:

• CAC = £50
• LTV = £300

That is usually a healthier position than:

• CAC = £120
• LTV = £150

How to reduce customer acquisition cost

If your CAC is too high, you may be able to improve it by:

• improving landing page conversion rate
• refining ad targeting
• strengthening your offer
• improving sales follow-up
• increasing referral and organic traffic
• testing new channels
• improving onboarding and qualification

Even small improvements in conversion rate can reduce CAC significantly.

Frequently asked questions

How do you calculate customer acquisition cost?

Divide your total marketing and sales spend by the number of new customers acquired.

What is a good CAC?

There is no single ideal CAC for every business. A good CAC depends on your pricing, margins, retention and lifetime value.

Should CAC include salaries?

It can. Many businesses include sales and marketing salaries in a fully loaded CAC calculation, while others track media spend separately.

What is the difference between CAC and CPA?

CAC measures the cost to acquire a customer. CPA often measures the cost of a lead, sale or another conversion action.

Can CAC be zero?

Only if you acquire customers without any acquisition spend. In practice, most businesses will have at least some associated cost.

Why is my CAC so high?

High CAC can be caused by expensive traffic, poor conversion rates, low close rates, weak targeting or high sales overhead.

Check out our other calculators:
ROI
Conversion Rate
Customer Acquisition Cost