Master your customer acquisition strategy. Calculate, track, and optimize your CAC across all marketing and sales channels.
Customer Acquisition Cost (CAC) is a key business metric that measures the total cost required to acquire a new customer. It includes all marketing and sales expenses involved in convincing a prospect to become a customer.
(Marketing Costs + Sales Costs) ÷ New CustomersThe basic CAC formula shows how much you spend on average to acquire each new customer. A CAC of $100 means you spend $100 to acquire one customer.
Example:
($5,000 + $3,000) ÷ 40 customers = $200 CACCustomer Acquisition Costs vary significantly across industries due to factors like competition, sales cycle length, and customer lifetime value. Here's a breakdown of typical CAC ranges by industry:
Optimize your marketing spend:
Streamline your sales funnel:
Enhance the conversion path:
Optimize your acquisition channels:
Many businesses underestimate their CAC by not including all relevant costs:
Common timing mistakes include:
Channel attribution issues:
Quality considerations:
Advanced attribution models:
Analyze CAC across different segments:
Different channels require different approaches:
Paid Channels
Organic Channels
Beyond the basic CAC formula, these advanced calculations provide deeper insights into your customer acquisition efficiency:
CAC ÷ Customer Lifetime ValueCAC:LTV Ratio helps determine if your acquisition costs are sustainable relative to customer value.
Example:
$200 CAC ÷ $1,000 LTV = 0.2 ratio (good)Marketing Costs ÷ Marketing Acquired CustomersMarketing CAC isolates the cost efficiency of your marketing efforts.
Example:
$5,000 costs ÷ 25 customers = $200 marketing CACCAC × (1 ÷ Conversion Rate)Visitor Acquisition Cost shows how much you spend to acquire each visitor.
Example:
$100 CAC × (1 ÷ 0.02) = $5 per visitorMonthly Recurring Revenue ÷ CACMRR:CAC Ratio indicates how quickly you recover acquisition costs.
Example:
$300 MRR ÷ $900 CAC = 0.33 (3 month payback)