What is a good Customer Acquisition Cost?

There is no universal benchmark because CAC varies widely by industry. SaaS companies often see CAC between $200 and $500, while e-commerce businesses might pay $10 to $50 per customer. The key is to compare CAC to your Customer Lifetime Value and aim for an LTV:CAC ratio of at least 3:1.

Should I include salaries in CAC?

Yes. The salaries and commissions of your sales and marketing teams are a direct cost of acquiring customers and should be included for an accurate CAC calculation.

How can I reduce my CAC?

Focus on the highest-converting marketing channels and cut spending on underperforming ones. Improve your website conversion rate through A/B testing. Invest in organic channels like SEO and content marketing, which have lower marginal costs over time. Encourage referrals from existing customers to acquire new ones at minimal cost.

How to Calculate Customer Acquisition Cost

4 min readBusiness

Customer Acquisition Cost (CAC) measures how much your business spends to gain a single new customer. It is a vital metric for startups seeking funding, SaaS companies tracking unit economics, and any business that wants to ensure its marketing budget is being used efficiently. This guide explains the CAC formula, how to interpret the result, and how Toolin's CAC Calculator simplifies the process.

Quick Steps

1
Open the CAC Calculator
Go to Toolin's CAC Calculator tool.
2
Enter marketing and sales costs
Input total acquisition-related expenses for the period.
3
Enter new customers acquired
Input the number of new customers gained in that period.
4
Review your CAC
The tool shows the cost per customer and contextual benchmarks.

CAC Calculator

Calculate Customer Acquisition Cost for your business

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The CAC Formula

CAC = Total Sales & Marketing Costs / Number of New Customers Acquired

Example:
  Marketing Spend (Q1) = $30,000
  Sales Team Costs (Q1) = $20,000
  New Customers (Q1)    = 200

  CAC = ($30,000 + $20,000) / 200 = $250 per customer

What Costs to Include

Paid advertising spend (Google Ads, social media, display)
Content marketing costs (freelancers, tools, distribution)
Sales team salaries, commissions, and bonuses
Marketing software subscriptions (CRM, email, analytics)
Event sponsorships, trade shows, and promotional materials
Onboarding costs directly tied to acquiring new customers

How to Use the CAC Calculator

Open the CAC Calculator

Navigate to Toolin's CAC Calculator in your browser.

Enter total marketing and sales spend

Input all costs related to acquiring customers during a specific period.

Enter the number of new customers

Type the total number of new customers acquired during that same period.

View your CAC

The calculator displays your cost per customer along with benchmarks to help you evaluate the result.

CAC and Customer Lifetime Value

CAC is most useful when compared to Customer Lifetime Value (CLV or LTV). The LTV:CAC ratio tells you how much value each customer generates relative to what you spent to acquire them. A ratio of 3:1 is generally considered healthy, meaning each customer generates three times more revenue than it cost to acquire them. If your ratio is below 1:1, you are spending more to acquire customers than they bring in, which is unsustainable. If it is much higher than 5:1, you may be under-investing in growth.

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Frequently Asked Questions

What is a good Customer Acquisition Cost?: There is no universal benchmark because CAC varies widely by industry. SaaS companies often see CAC between $200 and $500, while e-commerce businesses might pay $10 to $50 per customer. The key is to compare CAC to your Customer Lifetime Value and aim for an LTV:CAC ratio of at least 3:1.
Should I include salaries in CAC?: Yes. The salaries and commissions of your sales and marketing teams are a direct cost of acquiring customers and should be included for an accurate CAC calculation.
How can I reduce my CAC?: Focus on the highest-converting marketing channels and cut spending on underperforming ones. Improve your website conversion rate through A/B testing. Invest in organic channels like SEO and content marketing, which have lower marginal costs over time. Encourage referrals from existing customers to acquire new ones at minimal cost.