Customer Acquisition Cost Calculator

Fee Customer Acquisition Cost (CAC) Calculator

Customer Acquisition Cost (CAC) is a metric that describes the total cost associated with acquiring a new customer. It is essential for businesses to measure CAC to understand their marketing efficiency, optimize spending, and ensure profitability.

Why is CAC Important?

1. Profitability Analysis: Knowing your CAC helps determine if your business model is financially sustainable.

2. Marketing Efficiency: It allows you to measure and evaluate how well your marketing & sales campaigns are performing over time.

3. Budget Optimization: Helps allocate funds to the most effective acquisition marketing and customer acquisition channels.

How to Use This Free CAC Calculator

This tool simplifies the process of calculating CAC by taking your total acquisition costs and dividing them by the number of new customers. Here is how it works:

First, start by inputting your expenses

Marketing Expenses: Enter your spending on marketing (advertising, social media ads, SEO, content creation, etc.).

Sales Expenses: Enter the costs associated with sales (salaries, commissions, CRM software, etc.).

Other Expenses: Any additional costs related to customer acquisition (promotional offers, onboarding costs, etc.).

Once done, proceed to input the total Number of Customers acquired within the time period that correspond with your spending numbers.

That's it! By clicking the Calculate button, you will now get the final result in the Result CAC field.

Example Calculation

Marketing Expenses: $5,000

Sales Expenses: $3,000

Other Expenses: $2,000

New Customers Acquired: 500

Calculation: CAC = (5000 + 3000 + 2000) / 500 = 10000 / 500 = 20

Result: The CAC is $20 per customer, meaning the company spends $20 to acquire each new customer.

Interpreting Your CAC Result

The lower your CAC is the better as it entails cheaper customer acquisition cost. Cheaper cost often means higher profit margins left in the business after said expenses.

To optimize CAC, consider reducing inefficient marketing spend, improving conversion rates, and increasing customer retention.

This free tool is part of our Idea Screening Lab offering. If you want access to more tools like this see our Free Tools page!