CAC Calculator

CAC formula

CAC=Total Cost of Sales and Marketing/Number of New Customers Acquired

Understanding the CAC result

The ideal CAC will vary according to your specific targets and the industry you are working in.

• A low CAC indicates that your business is efficiently acquiring customers at a lower cost, which is a sign of effective marketing and sales efforts.
• A high CAC suggests that acquiring new customers is expensive, which could impact your profits. This might indicate a need to optimize your acquisition strategies or explore more cost-effective processes.

When to calculate CAC

CAC should be calculated regularly to evaluate the cost-effectiveness of your marketing and sales strategies. You should especially calculate CAC:

• During quarterly or annual financial reviews.
• When considering new marketing channels.
• While deciding your pricing policies.

Monitoring CAC helps you understand if your customer acquisition efforts are sustainable or if you need to adjust your strategies to reduce costs.

How to calculate CAC with example

Suppose your company spent $50,000 on marketing and sales in a quarter and acquired 500 new customers. You would calculate CAC as follows:

CAC = Total Cost of Sales and Marketing/Number of New Customers Acquired

CAC = 50,000/500 = 100

In this example, your CAC is $100, which means that it costs your company $100 to acquire each new customer.

How to use the CAC calculator

Enter the total cost of sales and marketing and the total number of new customers that you acquired in a specific period into the CAC calculator. The tool will instantly provide you with your CAC.