How to calculate customer acquisition cost
Add up the marketing and sales costs incurred during a specific period, then divide by the number of new customers acquired during that same period.
CAC = (Cost of Marketing + Cost of Sales) ÷ Number of New Customers If you spent $10,000 on marketing and $5,000 on sales in a month and brought in 100 new customers, your CAC is ($10,000 + $5,000) ÷ 100 = $150 per customer. That single number tells you what you're really paying, on average, to acquire one customer — not just what the marketing team spent, and not just what sales spent, but the full combined cost.
Why CAC matters
CAC on its own is just a number — it becomes useful once you compare it against what a customer is actually worth. A common companion metric is the LTV:CAC ratio, comparing customer lifetime value (LTV) to CAC. A 3:1 ratio means the estimated lifetime value of a customer is about three times the cost of acquiring that customer. A ratio near 1:1 means the estimated LTV is roughly equal to CAC, leaving little room to cover other business costs.
CAC vs Advertising Cost Per Customer
CAC is broader than advertising cost alone. A blended CAC can include both marketing and sales costs, while a channel-specific CAC may measure only the costs associated with acquiring customers through a particular channel.
Frequently asked questions
What counts as "cost of marketing" and "cost of sales"?
Marketing cost typically includes ad spend, content, tools, and the relevant share of marketing team salaries for the period. Sales cost typically includes sales team salaries, commissions, and any sales-specific tools or travel. Exactly what you include varies by company — the important thing is being consistent from period to period so the trend is meaningful.
What's a "good" CAC?
There's no universal good number — it depends entirely on your industry, price point, and customer lifetime value. A $150 CAC is potentially healthy for a business where customers pay $600 a year, and unsustainable for one where customers pay $50 once. CAC is most useful compared against your own LTV and tracked over time, not against a generic benchmark.
Should I include existing-customer costs, like retention or support?
No — CAC is specifically about acquiring new customers, so retention, support, and account management costs for existing customers are usually excluded. These costs are typically tracked separately and may be considered when evaluating customer profitability or lifetime value.