The core formula
If sales and marketing activities cost 18,000 and generate 120 new customers, CAC is 150. Depending on your reporting policy, include agency fees, relevant salaries, software and campaign spend consistently.
Worked example
$12,000 acquisition costs ÷ 300 new customers = $40 CAC.
How to calculate CAC
- Choose the scope first: media-only, marketing CAC or fully loaded sales-and-marketing CAC.
- Add only the costs that belong to that definition and time period.
- Count new customers acquired under the same period and attribution rules.
- Divide acquisition costs by new customers and keep the definition consistent when comparing periods.
How to interpret CAC
CAC answers how much the business spends, under a chosen cost definition, to acquire one new customer. A marketing-only CAC can be useful for channel optimization, while a fully loaded CAC is more relevant to overall economics.
Compare CAC with gross-profit LTV and payback period, not only revenue. A customer may generate high revenue but still be unattractive if gross margin is thin or retention is short.
Common mistakes
- Dividing acquisition costs by all customers instead of new customers.
- Changing which payroll or agency costs are included between periods.
- Comparing CAC with revenue LTV when margin and retention are the real constraints.
Use the calculator
Calculate marketing CAC, fully loaded CAC and LTV-to-CAC ratio.
Open Customer Acquisition Cost CalculatorDecide which costs belong in acquisition
If sales and marketing activities cost 18,000 and generate 120 new customers, CAC is 150. Depending on your reporting policy, include agency fees, relevant salaries, software and campaign spend consistently.
Avoid mixing new and existing customers
CAC uses newly acquired customers as its denominator. Purchases made by returning customers may be valuable but should not inflate the count of acquired customers.
Frequently asked questions
Should sales salaries be included in CAC?
Include them when you are measuring fully loaded sales-and-marketing CAC; exclude them only when your defined metric is narrower.
Can I calculate CAC by channel?
Yes, if costs and attributable new customers can be separated consistently by channel.
What is the difference between CAC and CPA?
CPA can refer to any paid action, while CAC specifically refers to acquiring a new customer.
What should I verify about avoid mixing new and existing customers?
CAC uses newly acquired customers as its denominator. Purchases made by returning customers may be valuable but should not inflate the count of acquired customers.