Example numbers. One quarter. Replace with yours.
Customer acquisition cost
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…How to use the CAC calculator
This CAC calculator gives your customer acquisition cost, then payback and LTV:CAC.
- Marketing costs and sales costs for the period (0 if no sales team; count a founder’s selling time).
- New customers won in the same period.
- Optional: revenue per customer per month, gross margin and monthly churn (annual churn: enter LTV, annual revenue per customer × gross margin ÷ annual churn). One-off purchases: clear the example revenue and churn; enter LTV instead.
- Optional, behind the toggle: your own LTV (for one-off buyers: gross profit per order × orders per customer), ad spend and paid customers, and customers you need.
The customer acquisition cost calculator’s Copy link reopens the same numbers.
Customer acquisition cost formula
CAC is the average cost to acquire a customer: your total sales and marketing costs for a period divided by the new customers you won in that period.
Formula
CAC = (marketing costs + sales costs) ÷ new customers
Customer acquisition cost calculation example
$30,000 on marketing plus $20,000 on sales is $50,000; over 50 new customers, CAC is $1,000. The calculator splits it 60% marketing, 40% sales.
How to calculate customer acquisition cost
Pick one period, add every cost of winning customers in it, count new customers from that same period, and divide.
Count salaries and commissions of everyone who markets and sells, plus tools and agencies, not ad spend alone.
New paying customers only, not renewals, upsells or repeat buyers. Count split roles, such as a founder who sells, at the selling share of pay for the whole period.
With a long sales cycle, match customers to spending one cycle earlier (two quarters on a 6-month cycle). If spend rose from $40,000 to $60,000 for 50 customers, CAC is $1,200 on this quarter’s costs, $800 on lagged costs. Report the lagged one.
Blended vs paid CAC
Blended CAC spreads all your costs over every new customer; paid CAC divides ad spend by customers from paid channels.
If $12,000 of ad spend won 20 of the 50 customers, paid CAC is $600 against $1,000 blended. Counting ad spend only, paid CAC can sit below blended even when ads aren’t your cheapest channel. a16z’s paid CAC divides all costs by paid customers: $2,500.
Report both: label paid CAC “ad spend only”, and say which “blended” you mean: all new customers (a16z) or new plus expansion revenue (Benchmarkit).
What is a good customer acquisition cost?
A good CAC has no single dollar figure: published averages count different costs and customers, so judge it by LTV:CAC and payback.
LTV:CAC ratio
LTV:CAC is LTV ÷ CAC; as an LTV:CAC calculator, this tool takes LTV as monthly gross profit × lifetime (1 ÷ monthly churn). $120 a month ($150 at 80% margin) over 33.3 months (3% churn) is a $4,000 LTV, 4.0 times CAC.
The Aleph and Benchmarkit median for 2025 is 4.1x across 146 B2B SaaS companies, with LTV on gross profit, so 4.0 sits below it. It’s a median, not a target. In ecommerce, compare CAC with first-order gross profit: $24 on a $60 order at 40% margin doesn’t cover a $35 CAC; the second order does.
Where the 3:1 rule comes from
David Skok’s SaaS guideline is an LTV:CAC above 3, assuming LTV on revenue without gross margin, at 80% margin or more. On this calculator’s gross-profit LTV, that is 2.4:1 at 80% margin.
CAC payback period
CAC payback is how many months of gross profit a customer takes to repay its CAC. The CAC calculator works as a CAC payback calculator once revenue and margin are filled.
Formula
payback months = CAC ÷ (monthly revenue per customer × gross margin)
Use gross margin, not revenue: $1,000 ÷ $120 is 8.3 months; ignoring margin shows 6.7.
Aleph and Benchmarkit’s 2025 median is 16 months (198 B2B SaaS companies). Skok’s under-12-month rule dates from 2011.
What to do with your CAC
Plan the budget from the customers you need. 80 customers at a $1,000 CAC need an $80,000 budget. Treat it as a floor: CAC tends to rise as spend reaches colder audiences.
If LTV is near or below CAC, fix the customer first. $50 a month at 50% margin and 5% churn is a $500 LTV against a $1,000 CAC: each customer loses $500. Raise revenue or margin, or cut churn, whichever moves most.
If payback runs longer than you can fund, raise revenue per customer, cut the costliest channel, or ask for more payment up front.
Cut where the cost sits. Sales-heavy: shorten the sales process or make small deals self-serve. Marketing-heavy: convert more paid visitors.
If paid CAC is far above blended, shift budget toward referrals and organic search.
Frequently asked questions
What is a good LTV to CAC ratio?
It depends on your segment, because the spread around the median is wide. In the Aleph and Benchmarkit 2025 data, the top quartile reaches 7.8x and the bottom quartile 1.1x. Companies growing above 50% have a 7.2x median, against 3.2x for low-growth companies, and vertical SaaS reaches a 5.6x median, ahead of horizontal SaaS. Skok saw the best SaaS businesses reach 7 or 8. Compare with the segment closest to yours and with your own trend.
Is CAC the same as cost per acquisition (CPA)?
No. CPA divides ad spend by conversions of any kind, such as a lead, a sign-up or a sale, usually for one campaign. CAC divides every sales and marketing cost by new paying customers, what a16z calls “the full cost” of acquiring a customer. The two only compare once a conversion is a paying customer and every cost is in. In the CAC calculator, paid CAC sits closest to CPA, since it uses ad spend only.
What is the average customer acquisition cost?
No dollar average holds across companies, so the dated cost benchmark is a ratio: in Aleph and Benchmarkit’s 2025 data, the median B2B SaaS company spent $1.63 of sales and marketing per $1 of new-customer ARR, about 19% better than a year earlier. In the CAC calculator’s example, a $1,000 CAC against $1,800 of first-year revenue ($150 × 12) is $0.56 per $1; at the median ratio, the same customer would cost about $2,934. The ratio applies to SaaS only.
What is a good CAC payback period?
It depends on deal size and growth. In the 2025 Aleph and Benchmarkit data, companies under $5K annual contract value have an 11-month median, those at $50K to $100K a 22-month median, and companies growing above 50% a 10-month median. Skok notes that in enterprise land-and-expand models, payback can run around 20 months and “the model works fine”.
What costs are included in customer acquisition cost?
Customer acquisition cost components are ad spend, salaries and commissions of the people who market and sell, software, agency and contractor fees, content, a share of overhead, and referral fees, credits or first-order discounts. A quarter with $100,000 of these costs and 1,250 new customers gives a CAC of $80. Enter each one in the CAC calculator’s marketing or sales costs box, by the team that spent it.
How do you calculate LTV for the LTV:CAC ratio?
To compare customer acquisition cost and customer lifetime value, work LTV out on gross profit: revenue per customer × gross margin × lifetime. With annual churn of 20%, lifetime is 1 ÷ 0.20 = 5 years; match the units, so monthly revenue goes with monthly churn. The 4.1x benchmark uses the annual version: annual revenue per customer × gross margin ÷ annual churn. a16z goes stricter and uses net profit per customer. The CAC calculator takes monthly churn, or your own LTV behind the toggle.