3D Printer – Buy vs Outsource CalculatorAbsence Percentage CalculatorAccumulated Depreciation CalculatorAdditional Funds Needed CalculatorAttrition Rate CalculatorAverage Collection Period CalculatorBounce Rate CalculatorBradford Factor CalculatorBreak-even CalculatorBuild vs. Buy CalculatorBurndown Chart CalculatorBusiness Budget CalculatorBusiness Loan CalculatorChurn Rate CalculatorContribution Margin CalculatorCost of Doing Business CalculatorCPC and CPM CalculatorCPM CalculatorCTR CalculatorCustomer Acquisition Cost Calculator – CAC CalculatorCustomer Retention Rate CalculatorEVM CalculatorEffective Corporate Tax Rate CalculatorEMV Calculator – Expected Monetary ValueExit Rate CalculatorFIFO Calculator for InventoryFTE CalculatorGMROI CalculatorGoogle AdSense CalculatorGRP CalculatorHHI Calculator (Herfindahl-Hirschman Index Calculator)High-Low Method CalculatorLabor Cost CalculatorLemonade Stand CalculatorLiquid Net Worth CalculatorMan-Hours CalculatorDays Off CalculatorOnline Marketing Conversion CalculatorParking Ratio CalculatorPayback Period CalculatorPre-Money and Post-Money Valuation CalculatorPVGO CalculatorPrice Per Unit CalculatorProfitability Index CalculatorRevenue Per Employee CalculatorROAS CalculatorSaaS Lifetime Value CalculatorSaaS Metrics CalculatorSales Commission CalculatorSell-Through Rate CalculatorSmoker’s CTC Calculator – Cost to CompanySoftware Contract Value CalculatorTenure CalculatorTurnover Rate CalculatorWebsite Ad Revenue CalculatorYouTube Money Calculator

Introduction to CAC

Customer Acquisition Cost, or CAC, is a crucial metric for businesses to gauge the efficiency of acquiring customers. This cost represents the money required to bring in a single customer. Essentially, it encompasses the expenses related to sales and marketing efforts. A lower CAC implies a more efficient business in acquiring customers.

Calculation of CAC

Let’s break down the steps to calculate CAC using a practical example:

Step 1: Determine the Cost of Marketing

Identify the money spent on marketing efforts. For instance, if a business invested $1,000 in marketing, this becomes the cost of marketing.

Step 2: Determine the Cost of Sales

Calculate the cost associated with delivering the product or service. In the example, the cost of sales for Company Alpha is $12,000.

Step 3: Determine the Number of New Customers

Establish the count of new customers acquired during a specific period. In this scenario, let’s assume Company Alpha gained 1,000 new customers.

Step 4: Apply the CAC Formula

Use the CAC formula to calculate the customer acquisition cost:

���=(���� �� ���������+���� �� �����)������ �� ��� ���������CAC=NumberofNewCustomers(CostofMarketing+CostofSales)​

For Company Alpha, the CAC is \frac{($1,000 + $12,000)}{1,000} = $13.


Can customer acquisition cost be negative?

No, a negative CAC is not possible. A negative CAC would suggest getting paid to acquire customers, which is unrealistic.

How do I calculate CAC?

Follow these steps:

  1. Determine the cost of marketing.
  2. Determine the cost of sales.
  3. Determine the number of new customers.
  4. Apply the CAC formula.

What if the number of new customers is zero?

In such a case, the CAC becomes infinite (∞∞), signifying that costs are incurred without acquiring any customers.

Understanding CAC

A higher CAC indicates a business is spending more money to acquire a single customer, highlighting inefficiency. Businesses should strive to lower their CAC to enhance growth efficiency.

This customer acquisition cost calculator empowers businesses to assess their strategies and make informed decisions for sustainable growth.