Transparent Growth Measurement (NPS)

Customer Acquisition Cost Calculator (CAC)

The Customer Acquisition Cost (CAC) is a metric used to determine the total average cost your company spends to acquire a new customer.

Why is it important to know CAC?
  • Gives an idea of the average total cost spent on acquiring a new customer.
  • Throws light on the efficiency of your sales and marketing efforts
  • Keeps a tab on your sales and marketing spend because an increase in CAC indicates there is an underlying problem.

Hmmm… looks like we can help you refine those numbers for better results and profitability!

Get Started!

7 Important Metrics Every Startup Founder Should Care About

Do you all know that it’s more costly to acquire new prospects than to retain existing ones! That’s why extending your CLV is essential to a healthy business model & overall business strategy… Don’t believe us? Here is an Ebook on 7 vital metrics every startup founder should know – you need to read if you want to increase profitability, retention and overall ecommerce success.


Why these 7 metrics are significant for your business and should be measured at regular intervals?

How to Use Customer Acquisition Cost (CAC) Calculator?

Other Calculator

Explore More

Similar Blog's

How to calculate Marketing percentage Customer Acquisition Cost (CAC)
Customer Acquisition Costs (CAC) – what you pay on average to acquire new customers – is obviously pretty darn important.
LTV CAC Ratio: What is it, How to Calculate & More
The link between a customer’s lifetime value and the cost of acquiring them is measured by LTV/CAC. Client acquisition cost (CAC) is the cost incurred when a
Learn how to calculate CAC payback period and also understand why it is a crucial metric. Here is all you have to know on CAC. Read on!
What is Customer Acquisition Cost (CAC) and Why it’s Important to your Startup?
Customer acquisition cost is the cost associated with convincing a consumer to buy your product or service, including research, marketing
How to Calculate Customer Acquisition Cost with Formula
Customer acquisition cost (CAC) is a metric used to describe how much money companies spend acquiring new clients. In addition to calculating the resources
How to calculate Time Payback of Customer Acquisition Cost (CAC)
Do you know to what extent it takes for a client to pay back what it cost you to secure them? Do you know how you get your CAC


The ultimate digital marketing checklist with hacks, tips and more! Download it for FREE! Find the right strategy for your business with our checklist!

PPC Quizzes

Test your pay-per-click advertising expertise with interactive assessments. Stay sharp, refine strategies, and maximize ad performance.

Run productive experiments in Google Ads

You might be a Google Ads expert, but how smoothly can you run experiments in Google Ads?

Test Now
Test your knowledge of Google Ads extension

You might be skilled at running Google Ads, but can you effectively utilize extensions in Google Ads?

Test Now


Answers to Frequently Asked Questions about CAC

What is Sales and Marketing Cost ?

Sales and Marketing Cost is a Program and advertising spend + salaries + commissions and bonuses + overhead in a month, quarter or year.

What are New Customers?

New Customers are a number of new customers in a month, quarter, or year

What percentage should CAC be?

Businesses should aim to keep their CAC as low as possible while still acquiring high-quality customers. This can be achieved through efficient marketing strategies, effective targeting, and building strong relationships with customers to encourage repeat business.

The ideal percentage of CAC will depend on factors such as the industry, customer retention rates, and profit margins. In some industries, a CAC of 10% or less of the LTV may be considered good, while in others, a CAC of 50% or more of the LTV may be acceptable.

How can a customer acquisition cost calculator benefit my business?

By using a customer acquisition cost calculator, businesses can gain insight into their customer acquisition costs and make informed decisions about their marketing and sales strategies. It can help businesses identify areas where they can reduce costs and improve their overall profitability.

Is a customer acquisition cost calculator difficult to use?

No, customer acquisition cost calculators are typically easy to use. They usually require inputting data such as marketing and sales expenses, and the number of new customers acquired. The calculator then computes the customer acquisition cost and presents the result.

What factors should I consider when using a customer acquisition cost calculator?

When using a customer acquisition cost calculator, it’s important to consider all the costs associated with acquiring a new customer, including marketing and sales expenses, as well as any other costs such as technology or staffing. It’s also important to consider the timeframe for which the costs are being calculated.

What is a good customer acquisition cost?

A good customer acquisition cost can vary depending on the industry, marketing strategy and business model. However, in the general thumb rule a healthy CAC should be lower than the lifetime value (LTV) of a customer. The LTV refers to the amount of money a customer is expected to spend on products or services over their lifetime. The CAC should ideally be a fraction of the LTV so that the business can earn a return on investment from each customer it acquires.

What does CAC stand for in business?

In business, “Customer Acquisition Cost” is referred to as CAC. It refers to a business’s overall expense to bring on a new client.

What is customer acquisition cost, with example?

A business’s overall expense to acquire a new customer is known as customer acquisition cost (CAC). All costs associated with marketing and sales, such as advertising, promotions, salaries, commissions, and incentives, are included in this.
For example, if a company spends $10,000 on a marketing campaign that generates 100 new customers, the CAC would be $100 per customer ($10,000 / 100 customers).

By calculating the CAC, a company can evaluate the effectiveness and efficiency of its customer acquisition strategies and make informed decisions about how to allocate its marketing and sales budgets.

How do I calculate customer acquisition cost?

You must divide the total amount spent on sales and marketing efforts by the number of new customers acquired during that period to get customer acquisition cost (CAC). The steps to compute CAC are as follows:

  1. Determine the period for which you want to calculate CAC.
  2. Sum up all the prices incurred for gaining new clients then, including marketing, sales, and advertising charges.
  3. Calculate the entire cost by dividing it by the number of new clients attracted over the same time frame.

The formula for calculating CAC is:


CAC = Total sales and marketing costs / Number of new customers acquired


For example, if you spent $10,000 on sales and marketing during a month and acquired 100 new customers during that same month, your CAC would be $100 ($10,000 / 100 = $100).

You can more effectively manage resources and make price decisions if you know how much it costs your company to gain new consumers. This information may be obtained by calculating CAC.

What is CAC used for?

Customer Acquisition Cost (CAC) is a metric used to assess how much business costs to bring on new clients. Businesses must determine this metric since it can show them how much money they should invest in sales and marketing to attract new clients.
By employing a CAC calculator, firms may determine the cost of gaining a new customer and track the performance of their marketing and sales tactics. The objective is to lower CAC by optimizing customer acquisition strategies, such as selecting the appropriate audience, raising conversion rates, and reducing marketing costs.
In conclusion, CAC is used to assess the efficacy and efficiency of customer acquisition strategies and to pinpoint areas that need to be improved to lower the cost of obtaining new clients.

What is customer acquisition cost in India?

The overall expense enterprises in India expend to bring in new clients is customer acquisition cost or CAC. Advertising, salaries, commissions, and bonuses are all examples of marketing and sales expenses.
The CAC in India can change depending on the sector, target market, and marketing channels employed. For instance, due to competition, the CAC for e-commerce businesses in India may be more significant, whereas it may be lower for companies that target specialized audiences.
Tracking the costs associated with obtaining a new client in India is done by dividing those costs by the total number of new customers acquired over a specified period.

Businesses in India may assess the efficiency of their customer acquisition tactics and make educated pricing decisions by using CAC, ensuring that they spend less on client acquisition than the cost of their product or service.

Contact Us