Customer Acquisition Cost (CAC) Calculator
CAC with the salaries, tools and agency fees included, and payback counted in gross profit rather than in revenue you have not delivered yet.
Paid media $42,000.00
Salaries and commission $35,000.00
Tools and software $2,800.00
Agencies and contractors $0.00
Other acquisition costs $0.00
Total acquisition spend $79,800.00
New customers won 140
Customer acquisition cost $570.00
Revenue per customer per month $149.00
Gross margin 78%
Gross profit per month $116.22
Months to pay back CAC 4.9
Every cost of winning a customer is in the $79,800.00, not just the
$42,000.00 of media. Media alone would report a CAC of $300.00, which is
the number that makes a channel look profitable right up to the point
the payroll lands.
Payback is counted in gross profit, not revenue: $149.00 a month at 78%
margin leaves $116.22 to pay the $570.00 back, so it takes 4.9 months.
Counting revenue instead would say 3.8 months and quietly assume
delivery is free.
Under twelve months of payback means a customer funds the next one
inside a year, which is the point at which growth can be paid for out of
growth.
Match the period to the sales cycle. If a customer takes three months to
close, this month's spend won this month's customers from spend a
quarter ago, and comparing the two in the same month makes a good month
look like a cheap one.
Output is valid and updates as you type.
Fix the highlighted fields to update the output.
CAC is spend divided by new customers. The formula is not the problem. The numerator is: ad spend goes in, and the salaries of the people who run the ads, the tools they run them with and the agency retainer do not. A CAC built from media spend alone is a cost per click with a better job title.
This has a field for each of those costs, and it tells you what the media-only number would have been so the gap is visible.
How to use
- Fill in every cost of winning customers in the period: media, the sales and marketing payroll that goes on acquisition, tools, agencies, anything else.
- Put in the new customers won in that period. New ones, not total, not leads.
- If you want payback, add what a customer pays per month and your gross margin. Leave them at zero to skip that section.
Example
42,000 of media, 35,000 of salaries and commission, 2,800 of tools, 140 new customers, each paying 149 a month at a 78 percent gross margin:
Paid media $42,000.00
Salaries and commission $35,000.00
Tools and software $2,800.00
Agencies and contractors $0.00
Other acquisition costs $0.00
Total acquisition spend $79,800.00
New customers won 140
Customer acquisition cost $570.00
Revenue per customer per month $149.00
Gross margin 78%
Gross profit per month $116.22
Months to pay back CAC 4.9Media alone would have said 300. That is not a small difference in emphasis; it is the difference between a channel that pays back in five months and one that looks like it pays back in two and a half, and the payroll lands either way.
Pitfalls
Payroll is an acquisition cost. If two people spend their week running campaigns and closing deals, their salaries won you those customers as surely as the ad spend did. Leaving them out is the most common reason a reported CAC is half the real one.
Divide by new customers, not all customers. Total customers grows every month, so dividing by it produces a number that falls steadily while nothing improves. It is a metric that congratulates you for having been in business a while.
Leads and trials are not customers. Cost per lead is a useful number and it is not this one. If you divide by trials you get a cost per trial, and the conversion rate from trial to paid is exactly the thing it hides.
Match the period to the sales cycle. If a deal takes three months to close, this month’s customers came from spend a quarter ago. Dividing this month’s spend by this month’s wins makes a good month look cheap and a slow one look expensive, and both readings are artefacts.
Payback in revenue is not payback. Revenue you have not delivered has not paid for anything. 149 a month at 78 percent margin is 116.22 of gross profit, and that is what repays the 570. Counting the revenue would say 3.8 months and assume delivery is free.
Blended CAC hides your best channel. One CAC across organic, referral and paid is an average of a free channel and an expensive one. It is fine for the board pack and useless for deciding where the next 10,000 goes. Run the tool once per channel with that channel’s costs.
Compatibility
Arithmetic in the browser: nothing is uploaded and nothing is stored. The share link carries the figures, so a CAC can travel with its workings instead of arriving as a single number nobody can check.
The costs are fields rather than an integration on purpose. Which salaries count as acquisition is a judgement about your own company, and no API can make it. Decide the split once, write it down, and apply it the same way every month; a CAC that is comparable to last month’s is worth more than one that is precisely correct this month.
Payback assumes a monthly subscription. For a one-off sale the payback question is just whether the gross profit on the sale exceeds the CAC, which the two figures here answer directly.