Free calculator
CAC calculator: what a customer actually costs you.
Enter what you spend to win customers and what a customer is worth. You get customer acquisition cost, payback period, and the LTV to CAC ratio. Nothing is stored and no email is required.
Your numbers
- Customer acquisition cost
- $2,750
- Lifetime value
- $15,960
- LTV to CAC ratio
- 5.8 to 1
- Payback period
- 4.1 months
Total acquisition cost of $33,000 across 12 customers.
$665 of gross margin per month for 24 months.
Three to one is the common benchmark for a sustainable acquisition engine.
Under twelve months keeps growth fundable out of gross margin.
Healthy. The economics support spending more in the channels already producing these customers.
The formulas
Written out, so you can argue with them
Customer acquisition cost
CAC = (marketing spend + sales cost) / new customers won in the same period. Both numbers must cover the same window, or the result flatters a slow month.
Lifetime value
LTV = revenue per customer x gross margin x lifespan in months. Margin matters: revenue-based LTV overstates what a customer is worth by whatever delivery costs.
LTV to CAC ratio
LTV / CAC. Below one, each sale loses money. Around three, acquisition funds itself. Far above five usually means underinvestment rather than brilliance.
Payback period
CAC / monthly gross margin per customer. This is the cash-flow question: how long the business carries the cost of winning a customer before that customer pays it back.
Worked example
A B2B software team, one quarter
The default numbers in the calculator are this example. It is the shape I see most often in growth-stage B2B: acquisition is not broken, but payback is slower than the team assumes because sales cost gets left out of the math.
- Marketing spend, one quarter
- $24,000
- Sales cost, same quarter
- $9,000
- New customers
- 12
- Revenue per customer, monthly
- $950
- Gross margin
- 70%
- Average lifespan
- 24 months
CAC lands at $2,750. Lifetime value is $15,960, a ratio near six to one, with payback just over four months. Strong economics, and the honest conclusion is that this team is spending too little, not too much.
When the number looks wrong
Four things to check first
Mismatched periods
Spend in one quarter rarely closes customers in that same quarter. If your sales cycle runs 90 days, compare spend to the customers it actually produced, offset by the cycle.
Missing sales cost
CAC that counts only ad spend is a media efficiency number, not an acquisition cost. Salaries, commission, and the tooling that carries a deal all belong in it.
Renewals counted as new
Expansion revenue and renewals make CAC look excellent while new logo growth stalls. Count only first-time customers in the denominator.
Revenue used instead of margin
A high LTV built on revenue rather than gross margin hides delivery cost. Services businesses are the usual casualty here.
Want the rest of the picture? The digital marketing audit scores readiness across six areas, and the Project Scope Estimator gives a range for the work in front of you. Both are on the marketing math path too.
Next step
A number is a diagnosis, not a decision.
If CAC is climbing or payback keeps stretching, the cause is usually positioning or channel mix rather than bid strategy. Bring the number to a free consult and I will read it with you.