Customer Acquisition Cost (CAC) Calculator
Work out your Customer Acquisition Cost (CAC) — what it costs to win one customer — and compare it to lifetime value with the crucial LTV:CAC ratio.
Acquisition Metrics
0 = skip LTV:CAC ratio
Customer Acquisition Cost
₹2,000
LTV:CAC 3.00 : 1 — Healthy (≥ 3:1)
CAC (cost per customer)
₹2,000
LTV : CAC Ratio
3.00 : 1
Healthy (≥ 3:1)
Customer Lifetime Value
₹6,000
Total Spend
₹5,00,000
How It Works
Customer Acquisition Cost (CAC) is one of the most important metrics for any business that spends to grow: it is the total sales and marketing cost divided by the number of new customers those efforts won in the same period. If you spent ₹5,00,000 and gained 250 customers, your CAC is ₹2,000. On its own CAC is only half the story — what matters is whether a customer is worth more than they cost to acquire. That is where the LTV:CAC ratio comes in: dividing the average customer lifetime value (the total profit a customer brings over their relationship) by the CAC. A ratio around 3:1 is generally considered healthy — you earn three rupees for every rupee spent acquiring. Below 1:1 you lose money on each customer; far above 3:1 you may be under-investing in growth. Enter your spend, new customers and (optionally) lifetime value to see both.
Formula
CAC = Total sales & marketing spend ÷ New customers acquired. LTV:CAC ratio = Customer lifetime value ÷ CAC (aim for ≥ 3:1).
Frequently Asked Questions
How is Customer Acquisition Cost calculated?
CAC = total sales and marketing spend ÷ number of new customers acquired in the same period. Include ad spend, salaries, tools and campaign costs for an accurate figure.
What is a good LTV:CAC ratio?
Around 3:1 is the widely-cited healthy benchmark — a customer is worth about three times what they cost to acquire. Below 1:1 is unprofitable; much above 3:1 may mean you are under-spending on growth.
What is customer lifetime value (LTV)?
The total profit you expect from a customer over the entire relationship. It combines average purchase value, purchase frequency and how long customers stay. A higher LTV justifies a higher CAC.
What costs go into CAC?
All the costs of winning customers: advertising and marketing spend, sales-team salaries and commissions, marketing software and tools, and campaign/content costs — divided by the customers gained.
How can I lower my CAC?
Improve conversion rates, target higher-intent audiences, boost referrals and organic/SEO channels, and increase retention (a longer-lasting customer improves LTV:CAC even if CAC is unchanged).