Methodology: CAC Calculator

1. Scope

Computes customer acquisition cost from total acquisition spend divided by customers acquired, plus payback-month and LTV:CAC ratio. It does not attribute spend across channels or model marketing-mix effects.

2. Inputs and outputs

Inputs

salesAndMarketingSpend number (currency)
customersAcquired number
arpu number (currency/mo)
grossMargin percent default: 80
monthlyChurn percent default: 5

Outputs

cac

spend / customers.
paybackMonths

cac / (arpu × grossMargin).
ltv

arpu × grossMargin / monthlyChurn.
ltvCacRatio

ltv / cac.

Engine source: src/lib/cac-calculator/engine.ts

3. Formula / scoring logic

cac            = sales_marketing_spend / customers_acquired
payback_months = cac / (arpu * gross_margin)
ltv            = (arpu * gross_margin) / monthly_churn
ltv_cac_ratio  = ltv / cac

4. Assumptions

Spend is fully-loaded: paid ads, sales salaries, tooling, and attributed content cost.
Customers-acquired is net-new, not re-activated.
ARPU and margin are steady-state.

5. Data sources

OpenView SaaS Benchmarks 2024 (CAC payback percentiles) as of 2024
SaaS Capital Annual Survey as of 2024

6. Known limitations

Blended CAC hides channel-level economics. Organic-heavy businesses with a small paid budget will look stronger than they are.
LTV:CAC guidance (often quoted as 3:1) is industry lore; benchmarks from OpenView and SaaS Capital vary by stage and vertical.

7. Reproducibility

Input
spend = $20,000, customers = 100, arpu = $50, grossMargin = 80%, monthlyChurn = 3%.

Expected output
cac = $200, payback = 5 months, ltv ≈ $1,333, ltv:cac ≈ 6.7×.

8. Change log

2026-04-24 methodology page first published.