Customer Acquisition Cost (CAC)
Total sales & marketing spend divided by new customers acquired
FORMULA
CAC = Total Sales & Marketing Spend / Number of New Customers
Alternate Calculations
Blended CAC
Total Acquisition Spend / (Organic + Paid New Customers)Paid CAC
Paid Marketing Spend / Paid-Channel New CustomersWhat is Customer Acquisition Cost?
Customer Acquisition Cost (CAC) measures the total average cost your company spends to acquire a single new customer. It includes all program and marketing spend, salaries, commissions, bonuses, and overhead associated with attracting and converting a new customer.
CAC is one of the most important metrics for evaluating marketing efficiency and unit economics. A lower CAC means more efficient acquisition. It is commonly paired with Customer Lifetime Value (LTV) to determine the return on acquisition investment.
Chart
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Sample Data
| month | spend | newCustomers | cac |
|---|---|---|---|
| Jan | 50,000 | 125 | 400 |
| Feb | 48,000 | 130 | 369 |
| Mar | 55,000 | 155 | 355 |
| Apr | 52,000 | 148 | 351 |
| May | 60,000 | 180 | 333 |
| Jun | 58,000 | 175 | 331 |
Required Data Columns
Total Marketing SpendTotal Sales SpendNew Customers Acquired