Calculator

What Does a Customer Really Cost?

Spending $5,000 to win 50 customers costs $100 per customer. If each is worth far more over their life, that is efficient; if not, you are buying unprofitable growth. CAC is meaningless without comparing it to customer value (LTV).

Results

Visualization

Cashbizly provides illustrative business estimates only. Results depend on your inputs and assumptions and are not accounting, tax, or legal advice. Consult a CPA or financial advisor before major decisions. Tax-year figures (mileage, QBI, SEP, etc.) are labelled by year and should be verified at IRS.gov.

How It Works

CAC = Total Marketing & Sales Spend / New Customers Acquired in the period. It should be measured consistently (include salaries, ad spend, tools). The companion metric is LTV:CAC — healthy businesses often target 3:1 or better. This is standard unit-economics analysis for growing businesses.

What Should You Do?

Scenario 1: cutting spend 20% but losing only 10% of customers lowers CAC. Scenario 2: a $100 CAC with $400 LTV is great; with $90 LTV is a loss. Scenario 3: attributing only paid ads understates true CAC — include all acquisition cost.

Frequently Asked Questions

What should CAC include?

All acquisition cost — ads, salaries of sales/marketing, software, agency fees — not just ad spend.

What is a good CAC?

Only meaningful next to LTV. A 3:1 LTV:CAC is a common healthy benchmark; under 1:1 you lose money acquiring.

How do I lower CAC?

Improve conversion, retention, and referral; target better-fit channels. See our LTV and Conversion tools.

Authoritative References

Investopedia — Customer Acquisition Cost — CAC definition and benchmarking.
HubSpot — CAC — CAC methodology and SaaS benchmarks.