CAC Calculator
Calculate acquisition efficiency with payback and LTV:CAC context.
Result
CAC is spend divided by acquired customers in the same period.
Supporting metrics
The headline value alongside the engine's top supporting outputs.
How to use it
- Enter sales and marketing spend, new customers acquired, monthly ARPU, gross margin, and monthly churn for the same measurement period. Include all true acquisition costs such as paid media, acquisition-focused sales labor, agencies, and tools, but exclude retention-only work if you want a clean CAC view.
- Read CAC, payback period, gross profit per user per month, LTV, and LTV:CAC ratio. As a rule of thumb, LTV:CAC of 3 or higher is healthy, under 1 means you lose money on acquisition, and payback above 18 months is cash-flow heavy for most growing SaaS businesses.
- Interpret the metrics together instead of cherry-picking one. A seemingly acceptable CAC can still be dangerous if payback is long, and a great LTV:CAC ratio above 5 can mean you are actually under-spending on a channel that deserves more budget.
- Use the result to set CAC caps per channel, adjust bid targets, and decide whether the next dollar should go to conversion improvement, lower spend, or retention. If CAC is fine but LTV:CAC is weak, churn is probably the more important fix than top-of-funnel volume.
- Re-run monthly and by channel or campaign cohort. Track CAC, payback, and LTV:CAC side by side over time because a falling CAC can still mask worsening retention or margin erosion.
Questions people usually ask
What is a good CAC to LTV ratio?
The 3:1 ratio is the standard benchmark: customer lifetime value should be at least 3× the cost to acquire them. At 3:1, you recover acquisition cost in roughly one-third of the customer relationship and profit the rest. Below 1:1 means you lose money on every customer. Above 5:1 often signals underinvestment in growth.
What is typically included in CAC calculation?
All sales and marketing costs to acquire a new customer: paid advertising spend, agency fees, sales team salaries and commissions (prorated to new acquisition activity), tools and software, events, content creation. Exclude account management and retention costs — those belong in LTV calculation.
How long should it take to recover CAC?
SaaS benchmarks: under 12 months is excellent, 12-18 months is typical for B2B, over 24 months signals cash flow risk. E-commerce: under 6 months is strong. The payback period determines how much capital you need to scale — a 6-month payback lets you reinvest quickly; 18 months requires sustained funding.
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